International Price Setting (Scenario)

Multiple Choice

International Price Setting (Scenario)
The Comfy Couch Corporation (CCC) is a leading American manufacturer of sofas, sectionals, and lounge chairs. Managers from the U.S.-based firm recently met a London retailer who expressed an interest in selling CCC lounge chairs in his stores. The retailer sells a number of different furniture brands in his stores, so CCC managers need to price their furniture appropriately if the firm is to be competitive in the European market.
-If CCC managers employ rigid cost-plus pricing they would most likely be disadvantaged because ________.

A) rigid cost-plus pricing often fails to account for local market conditions
B) through rigid cost-plus pricing, added costs of doing business abroad cannot be adjusted
C) rigid cost-plus pricing overly focuses on the prevailing conditions in the local markets
D) rigid cost-plus pricing is primarily driven by buyer demand in the local markets