- Cost Plus Pricing - Involves business working the cost of producing one unit of a product out and then adding a percentage for profit. Sometimes called mark-up pricing. It's simple to use, and ensures a profit's made.
I.E - if a product costs £6 and the mark-up's to be 200% then £12 will be added onto the cost, making the total price £18
- Contribution Pricing - Ensures that variable costs of production are met. Any extra will be a contribution to the company's fixed costs or overheads. For example, if the variable cost of producing a doll is £12 and its sale price is £25 then the contribution to overheads from each doll produced is £13.
- Price Discrimination - This involves charging different prices to different groups of consumers for the same level…
Similar Business Studies resources: