An entrepreneur considers cost, customer willingness to pay, and competitor price together while setting product price. What type of decision is this?
Answer and explanation
Correct answer: Strategic pricing
Pricing is strategic when it is based on several connected considerations rather than a random guess. Cost sets a financial constraint, customer willingness to pay reflects perceived value and demand, and competitor prices indicate the market context. Balancing these factors helps the entrepreneur choose a price that supports both sales and viability.
Frequently asked questions
What is the correct answer to this question?
Strategic pricing
Why is this the correct answer?
Pricing is strategic when it is based on several connected considerations rather than a random guess. Cost sets a financial constraint, customer willingness to pay reflects perceived value and demand, and competitor prices indicate the market context. Balancing these factors helps the entrepreneur choose a price that supports both sales and viability.
Which subject and chapter does this question cover?
This is a Class 12 Business Studies question. Chapter: Marketing Management. Topic: Price.
