Paper 2 · November 2019 · Pricing decisions
Which of the following is a factor that influences a firm's pricing decisions?
AThe level of demand and the elasticity of demand for the product
BThe number of public holidays observed in the firm's home country
CThe physical size of the firm's head office building
DThe average age of the firm's administrative staff
Explanation
Pricing decisions are shaped by market-related factors such as the level of demand and how sensitive that demand is to price changes (price elasticity), alongside costs and competitors' prices. Public holidays, office size and staff age have no bearing on how a product should be priced.
Derived from ZIMSEC Business_studies Paper 2, November 2019, Q6