What factor is typically ignored when using average-cost pricing?

The correct answer pertains to the demand curve, which is typically overlooked in average-cost pricing strategies. Average-cost pricing involves determining the cost of producing a product and then adding a markup for profit, based on an average of both fixed and variable costs. However, this method does not take into account how the pricing may influence consumer demand or how demand changes at various price points.

Ignoring the demand curve can result in pricing that does not align with what customers are willing to pay, potentially leading to lower sales or excess inventory. This pricing strategy often focuses solely on cost recovery rather than the consumer's perception of value or the competition in the market. In doing so, businesses may miss opportunities to optimize pricing in line with market conditions and consumer demand, which is crucial for maximizing profitability and market share.