All of the Following Are Disadvantages of Cost-Plus Pricing Except

Multiple Choice

All of the following are disadvantages of cost-plus pricing except

A) It ignores the price elasticity of demand: for example, it may be possible to increase profits by raising or lowering price.
B) If the industry comprises identical firms (with identical costs) , markups could be consistent among firms leading to no one firm having a competitive edge in terms of price.
C) Allocating and apportioning business overheads to individual products could be somewhat arbitrary.
D) The business has less incentive to cut or control costs: if costs increase, then selling prices increase. Consequently, this might further erode a firm's competitiveness.