CLEP Marketing

Answer: E - Given a recent shift in a small town’s economy, a significant proportion of the town’s working age individuals have lost their jobs. The local big-box retailer decides to sell its non-perishable goods at a price that only recoups its costs in what is termed break-even pricing. Break-even pricing is a strategy whereby a product is priced in such a manner that a company is able to recover the costs of developing/purchasing that product. This big-box retailer is using this strategy to adapt to the economic shift in the town with fewer people capable of purchasing non-perishable products. A break-even pricing strategy aids in moving inventory and recovering costs.