When considering the ‘feasible price range’ for a new product, which of the foll

Question

When considering the ‘feasible price range’ for a new product, which of the following is true? A. The price should always be set equal to the true economic value of the product

B.The gap between the price and the perceived value is the ‘customer surplus’

C. None of the above

D. Price can never be set below the variable cost per unit

E. The gap between the price and the variable cost per unit is the ‘customer surplus’

F. The total cost per unit represents the “floor” of the feasible price range

G. The total economic value represents the “ceiling” of the feasible price range

Explanation / Answer

A. The price should always be set equal to the true economic value of the product.

Out of following options, The price should always be set equal to the true economic value of the product is true. Because, in “feasible price range” of a new product, It is most important to keep the true economic value of the product in mind and keep the price accordingly. So that, the customers feelds attracted to buy that new product.

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