Description
Pricing and Profits
1. Identify and define the other important internal and external factors affecting a firm’s pricing decisions.
2. Two Parts:
Part A: Explain how companies find a set of prices that maximizes the profits from the total product mix.
Part B: Discuss how companies adjust their prices to take into account different types of customers and situations.
Two references
Explanation & Answer
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Running head: PRICING AND PROFITS
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Pricing and Profits
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PRICING AND PROFITS
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Pricing and profits
Factors Affecting Pricing Decisions: Internal Factors
The cost, this refers to the cost of production. It is essential for the firm to consider the cost
of producing the product before they fix the prices. The firm needs to recover all the fixed and the
variable cost of producing as well as get some profit (Samuelson, 2003).
The set objectives, in the case where a firm’s objective is to increase return on investment
the prices will be high while if the objective of the firm is to capture a large market share then it
may charge a lower price.
Product ...