December 8, 2011

Cost Information for Pricing Decisions

Pricing decisions are normally market based and they are based on analysis of demand curves.

But product cost information is required in the pricing decision to arrive at the profit available at a proposed price. If the profit available is insufficient, a firm can't sustain its production and marketing. Only for short periods of time, the firms may be in market even though profits are inadequate in the light of expected long term profits.

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