Practice Quiz

CLEP Marketing

Category - Pricing

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A women’s clothing retailer adds a standard markup of 25% to the cost of its business-wear lines in an example of ___________ pricing.
  1. Introductory pricing
  2. Cost-plus pricing
  3. Competitive pricing
  4. Target pricing
  5. Target profit pricing
Explanation
Answer: B - A women’s clothing retailer adds a standard markup of 25% to the cost of their business-wear lines in an example of cost-plus pricing. Cost-plus pricing allows companies and retailers to maximize profit by adding standard price markups to products and services. Also known as markup pricing, this strategy increases the profit margin of the product and helps the company reach its target rate of return in the sale of goods.
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