In general, prices should not be based on costs because

A. consumers are cost-conscious.

B. producers rarely know what their costs are.

C. consumers make their purchase decisions based on perceived value.

D. producers need to avoid creating a cost competitive parity debate.

E. customers are always right.

Question

Kaiden Farley

Business

31 August, 09:49

In general, prices should not be based on costs because

A. consumers are cost-conscious.

B. producers rarely know what their costs are.

C. consumers make their purchase decisions based on perceived value.

D. producers need to avoid creating a cost competitive parity debate.

E. customers are always right.

+5

Answers (1)

Know the Answer?

Tyson Wolfe · Answer 1

C. consumers make their purchase decisions based on perceived value.

Explanation:

Consumer perceived value is the benefit of a product that the consumer receives by buying any specific goods or services. Perceived value is the satisfaction level of consumer that customer look in the product, rather than just paying for the product, therefore, the company need to work and develop their brand and value in the market. Cost does not define the value of the product, rather it is a satisfactory level of consumer that defines the value and price of product. Example; Customer does not pay for the software, however, they pay for the solution.