Topic: advantages of target-return priceRequired:• Please explain the photo attached, thank you! Advantages1. Dynamic price determination - Ilconsiders market factors of demandand supply whilo defining the sellingprico.Higher profitability-It takes intoaccount reducing coat as the sellingprice is already fixed beforehand.3. Efficient and optimum utilization ofresources-It leads to creative waysof reducing the cost of the productand leads to stable technological andeconomic gains for the company.4. Availability of value-added productsand services - The benefits of costreduction are passed on to thecustomers who enjoy bottor productsat cheaper prices.5. Better prediction and response tomarket changes - Coordinationamongst its various departments suchas production, marketing, design,and engineering enables it to form acohesive strategy in the event of anymajor shift in trends,

In order to determine the highest cost that a new product may have, target pricing involves…

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Economics

opic: advantages of target-return price Required: • Please explain the photo attached, thank you!

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Topic: advantages of target-return price Required: • Please explain the photo attached, thank you!

Advantages
1. Dynamic price determination - Il
considers market factors of demand
and supply whilo defining the selling
prico.
Higher profitability-It takes into
account reducing coat as the selling
price is already fixed beforehand.
3. Efficient and optimum utilization of
resources-It leads to creative ways
of reducing the cost of the product
and leads to stable technological and
economic gains for the company.
4. Availability of value-added products
and services - The benefits of cost
reduction are passed on to the
customers who enjoy bottor products
at cheaper prices.
5. Better prediction and response to
market changes - Coordination
amongst its various departments such
as production, marketing, design,
and engineering enables it to form a
cohesive strategy in the event of any
major shift in trends,

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