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Questions
Mention the advantages of cost plus pricing.
State two advantages of Cost plus pricing policy.
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Solution
- Cost plus pricing is the most widely used technique of pricing. It is a safe approach to pricing. It ensures full coverage of costs and helps in achieving a reasonable return on capital employed.
- The method is logical and can be defended on moral grounds. It discourages cut-throat competition in the market.
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RELATED QUESTIONS
It is also known as 'going rate pricing' or competition based pricing.
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______ determines the sales volume and the profit margins.
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State two disadvantages of Cost plus pricing policy.
