Question: A critical assumption when using target profit pricing is that a. a higher average price will not cause the demand for a product to fall.

A critical assumption when using target profit pricing is that

a. a higher average price will not cause the demand for a product to fall.

b. a higher average price will be offset by reductions in manufacturing costs.

c. profit is tied to the current value of the dollar in relation to foreign currencies.

d. a higher average price will cause new competitors to join the industry.

e. any price increase will be followed quickly by similar moves from all of your competitors.

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