Flyer Company sells a product in a competitive marketplace. Market analysis indicates that its product would probably sell at $48 per unit. Flyer's management desires a 12.5% profit margin on sales. Its current full cost for the product is $44 per unit. If the company cannot cut costs any lower than they already are, what would the profit margin on sales be to meet the market selling price?

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A: Use the rule P = MC x (ed /ed + 1)For ed = 1.3 and MC = 70, P = 70*(-1.3/-0.3) = $303.33For ed = 1.5…

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Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.