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      Question

      A bank that regularly monitors competitor interest rates

      and adjusts accordingly is following:
      A Cost-plus pricing Correct Answer Incorrect Answer
      B Competitive pricing Correct Answer Incorrect Answer
      C Skimming pricing Correct Answer Incorrect Answer
      D Value-based pricing Correct Answer Incorrect Answer
      E Psychological pricing Correct Answer Incorrect Answer

      Solution

      Competitive pricing sets rates based on competitors’ benchmarks. Why others are incorrect: Cost-plus uses internal cost; Skimming uses high initial rates; Value-based uses perceived value; Psychological uses pricing tricks. Banking Example: Matching competitor home loan rate reductions.

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