Which of the following best describes keystone pricing?

Keystone pricing is a pricing strategy commonly used in retail and involves setting the selling price of a product at roughly double its cost. This method simplifies pricing decisions and ensures a good markup to cover expenses and generate profit. By doubling the cost, retailers can easily calculate the retail price without the need to engage in complex pricing strategies or extensive market analysis. This approach is particularly prevalent in industries where products are relatively standardized, allowing for a straightforward application of the keystone method.

Other pricing strategies may consider different factors such as market demand, fixed cost additions, or setting prices below market value, but they do not fit the specific definition of keystone pricing. For instance, adding a fixed amount to the cost does not necessarily double it; this could lead to lower margins than those achieved using keystone pricing. Furthermore, pricing based on market demand involves adjusting prices according to consumer behavior, which departs from the simplicity and uniformity of keystone pricing. Lastly, pricing below market value aims to attract more customers but does not align with the concept of keystone pricing, which is focused on maintaining a consistent markup above cost.