Concept explainers
To state: The factors that must be considered before setting a
Answer to Problem 3R
Other than profit, there are several other factors that affect the price namely: cost, customers, location, competitors, etc.
Explanation of Solution
The following is the list of all the factors other than the profit that must be considered before setting a price:
- Cost- It is an important factor. One must ensure that the price set is capable enough to cover all the costs that are incurred for developing a product.
- Customers- Customers are the backbone of any business. Before setting the price, customers and their wants must be kept in mind as to provide them full satisfaction from the product.
- Location- Once you understand your potential customer, the next step is to locate the appropriate place where you need to place your business.
Introduction: Pricing is an important aspect of a product. It is determined by the supply and demand forces. A lot of expenses and other factors are considered before setting a price so as to cover all the expenses and makes some profit on the sale.
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