Assertion (A): Parity Pricing is the most logical strategy when it is very difficult to calculate the cost of the products.

Reason (R): When price leadership is well established, setting price according to the competitors is the safest policy.

1. (A) is true and (R) is false.
2. Both (A) and (R) are true and (R) is the correct explanation of (A).
3. Both (A) and (R) are true but (R) is not the correct explanation of (A).
4. Both (A) and (R) are false.

Both (A) and (R) are true but (R) is not the correct explanation of (A).

Reason — Both Assertion and Reason are true. Parity pricing is indeed appropriate when costs are difficult to measure, and it is also the safest policy when price leadership is well established. However, R does not directly explain A — the difficulty in cost calculation and the well-established price leadership are two separate situations under which parity pricing is appropriate.