Discussion
.......................... method of pricing strategies assumes that sales and profits are independent of costs, but are dependent on the demand.
Answer: B
The method is market based pricing.
Market or demand based pricing sets price by what customers in the market are willing to pay, not by the cost of the product. It assumes that sales and profits depend on demand, and so are independent of costs.
Break-even pricing is cost based, fixing the price at which revenue covers fixed and variable cost. Competition oriented pricing follows rivals' prices, and affordability based pricing targets what a low-income buyer can pay; neither rests on the demand assumption in the stem.
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