Question

Which of the following statements is true about the factors that affect pricing decisions? Select one:...

Which of the following statements is true about the factors that affect pricing decisions?


Select one:
a. Information about competitors' technologies is not useful for pricing decisions.

b. Information about a competitor in a perfect market affects pricing decisions.

c. Increase in price of a substitute product does not affect pricing decisions.

d. Managers must always be aware of the competition when pricing their products
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Answer #1
Statement A is False as it is necssary for a company to have knowledge about its competitors technologicies and its advancement
If the competitor has a technology which is more cost-effective then that of the company's then the company will have to change it's pricing decision
In a Perfect market it is assumed that every competitor has equal access to the resources and market so in a sense competiton does not really exist in a perfect market
Hence Statement B is False
Substitute products are those products which can be used as an alternative to a particular product. Like CNG & Petrol. So if there is a change in price of any one of the product
will always have an effect on the demand of other product. Hence the Increase in price of substitute shall be considered for pricing decision
Hence Statement C is False
Statement D is the only correct option
So Option D is answer
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