Factors that influence pricing decisions.
(1) Why wouldn’t a firm just drop any product that isn’t selling in high enough volume to reach its break-even point? (2) Is “9” style pricing ethical? Why or why not?
(1) Do you factor in the value of your time when you price-comparison shop? Why or why not? (2) As a consumer taking charge of your own financial future, what lessons could you take from the business concepts of fixed and variable costs?
Strategic considerations in pricing include marketing objectives, government regulations, customer perceptions, market demand, and competition. Break-even analysis is a way to determine how many units (the break-even point) a firm needs to produce in order to begin turning a profit by covering its fixed and variable costs. The break-even point is calculated by dividing fixed costs by the difference between the selling price and the variable costs per unit