Certified Management Accountant 2026 – 400 Free Practice Questions to Pass the Exam

Value-based pricing is actually one of the recognized general pricing approaches, as it focuses on setting prices primarily based on the perceived value to the customer rather than the cost of production or market conditions.

Cost-based pricing, on the other hand, calculates the price of a product by adding a markup to the cost of producing it, which ensures that costs are covered while targeting a desired profit margin. Market-based pricing considers the prices set by competitors and the market demand for a product, helping businesses align their prices competitively within the industry.

Illegal pricing, although it may arise in discussions about pricing strategies, is not a formal pricing approach recognized in the context of established pricing strategies. Legal and ethical considerations often guide pricing decisions, and any pricing method that involves illegal practices is not regarded as a legitimate strategy within the business community.

In summary, the correct answer indicates that illegal pricing does not fit within the framework of standard pricing strategies used by companies to establish their pricing.