Question

A limitation of revenue-oriented pricing is that _______. a. it cannot be used by manufacturing companies b. the profit goals of a company are not taken into account c. it does not focus on maximizing the surplus of income over costs d. determining costs can be difficult for many services

Answer 1

A limitation of revenue-oriented pricing is that it does not focus on maximizing the surplus of income over costs.

*Revenue-oriented pricing (also known as profit- oriented pricing or cost based pricing) where the marketer seeks to maximize the profits (i.e. the surplus income over costs) or simply to cover costs and break even.

* It is plan that focuses on increasing company income by maximizing both short and long term sales potential.

*Having a dedicated strategy of this kind is critical, as it is near impossible to grow revenue without a documented plan of action.

The only limitation is it focuses on maximizing the surplus of income over costs.

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