You Are Given the Scenarios Below

Multiple Choice

You are given the scenarios below. Select the appropriate effect based on the relationship between a product's cost, price, and profit.
-Charging too much

A) All costs are covered and volume sold is at a sustainable level
B) Only the cost of goods sold is covered, but since there is not enough gross margin to cover SG & A costs, the company will recognize a net operating loss.
C) All costs are covered for now, but the volume sold is the lowest, indicating that competitors with more reasonable pricing might drive company out of the market.