Comments on Questions and Problems Comments on Questions and Problems 18 1.
Many department stores have high costs due to the services offered.
Students will use a variety of examples. But, if cost-oriented approaches are used, then some estimates about the quantity to be produced, the target return expected, etc., must be made. Basically, experience curve pricing is a form of cost-oriented pricing, but average costs are estimated based on what they are expected to be in the future when a larger sales volume is achieved. See the discussion on page 514 of the text. This question can be answered with an illustration like Exhibit 18-6 on page 513.