Price determination is a critical aspect of business strategy. Companies often consider several factors when setting prices:
Cost-Based Pricing: This method involves calculating the total cost of production and adding a markup to ensure profit. Value-Based Pricing: Prices are set based on the perceived value to the customer rather than the cost of production. Competitive Pricing: This strategy involves setting a price based on what competitors are charging for similar products. Dynamic Pricing: Prices fluctuate based on market demand, time of day, or customer profiles.