Before estimating how much profit and how much market share can be earned at each possible price of a product, a company is most likely to:
a. choose the Return on Investment (ROI) target.
b. determine the corresponding costs for each price.
c. estimate industry supply.
d. implement pricing segmentation.
ANSWER: b
Before estimating how much profit and how much market share can be earned at each possible price of a product, a company is most likely to determine the corresponding costs for each price. Prior to this step, managers should estimate total revenue at a variety of prices.
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