Which pricing approach aims for a specific rate of return for a given output?

• A. Dynamic pricing.
• B. Cost-plus pricing.
• C. Market skimming.
• D. Target pricing.

Answer: (D)

This question is about pricing that is tied to delivering a specific return for a chosen level of output. Target pricing works by setting a price that will achieve the desired rate of return (or target profit) given the expected quantity. In practice, you define the return you want from the project or product and the forecasted output, then determine the price that makes that return possible, often working back to target costs if needed. This contrasts with pricing by cost-plus (price is built on costs plus a markup), dynamic pricing (price changes with demand), or market skimming (high price to quickly capture limited segments). So target pricing is the approach that aims for a specific return for a given output.