Question

Which of these is a drawback of
full cost pricing?

A.it is concerned about competitive.

B.it ignores demand behaviour.

C.it focuses more on future than on the past.

D.it is planned over several short runs.​

Answer 1

The drawback of full cost pricing is B) it ignores demand behaviour.

Explanation:

• The fundamental disadvantage of full cost pricing is it ignores call for behaviour this means that enterprise may also set a product rate primarily based totally on the total value plus method after which be amazed whilst it reveals that competition are charging considerably exclusive prices.
• Other drawbacks are Ignores rate elasticity, Product value overruns, Budgeting foundation and too simplistic.

• The full cost pricing is simple. It seems like addition of overall manufacturing costs,  promoting and administrative costs   and markup  divided by range of devices predicted to sell.

Answer 2

The correct option is (B). The drawback of full-cost pricing is Ignoring Demand Behaviour.

Know more about Full-Cost Pricing and its disadvantages:

• A pricing method wherein all applicable variable charges and a complete proportion of constant charges immediately because of the product are utilized in putting its promoting price is called a Full-Cost Pricing.
• There are several drawbacks or disadvantages to full-cost pricing like ignoring the competition, its too simplistic, ignoring price elasticity, ignoring demand factor, using the average cost, and ignoring marginal cost.