Deciding the amount to charge customers for products/services based on demand, competition, and the costs of raw materials.

Deciding the amount to charge customers for products/services based on demand, competition, and the costs of raw materials.

• A. Market Research
• B. Pricing
• C. Agent
• D. Retailer

Answer: (B)

Pricing is the process of deciding what to charge customers for products or services. This item focuses on that activity because it mentions setting a charge based on demand, competition, and raw-material costs. Understanding demand helps you set a price customers are willing to pay, considering competition helps you stay competitive, and including raw-material costs ensures the price covers production expenses and yields a profit. Market research is broader data gathering that can inform pricing, but the act described is specifically setting the price. An agent represents a company in selling, and a retailer is a sales channel; neither is about determining prices. So the best answer is pricing.

Pricing is the process of deciding what to charge customers for products or services. This item focuses on that activity because it mentions setting a charge based on demand, competition, and raw-material costs. Understanding demand helps you set a price customers are willing to pay, considering competition helps you stay competitive, and including raw-material costs ensures the price covers production expenses and yields a profit. Market research is broader data gathering that can inform pricing, but the act described is specifically setting the price. An agent represents a company in selling, and a retailer is a sales channel; neither is about determining prices. So the best answer is pricing.