Question

All of the following statements about price are true except which?

A. The price for a product or service must earn a profit for the company.

B. The price must generate enough sales dollars to pay for the cost of developing, producing, and marketing the product.

C. For most products and services, there is an agreed-upon price range set by makers.

D. Small changes in price can have big effects on both the number of units sold and company profit.

E. The price must be right—in the sense that customers must be willing to pay it.

Answer 1

Here, option A is correct as price set by the company must earn him some profit. A company cannot sell its product or service at a price which will earn losses.

Again, option B is correct as the price must be greater than the cost of developing, producing and marketing the product.

Also, option C is correct as price-makers often take collective decision over pricing of the product.

However, option D is incorrect as change in price must not have large effects on number of products sold or on company's profit. Otherwise, the businesses will be more fragile to losses.

Similarly, option E is correct because price of the product must be set in accordance to the consumer's willingness to pay for it.

Thus, option D is the correct answer.