1. What is meant by Cost-plus Pricing?
- This is the method of pricing which considers the toal cost per unit and then adds on a percentage to arrive at a final price.
- For example selling a product at £49.99 instead of £50 makes customers think of it as less than £50
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Other questions in this quiz
2. Which one of these is a motive for becoming an entrepreneur?
3. What is break even?
- when total revenue is equal to total costs
- when total revenue is higher than total costs
- when total costs are higher than total total revenue
4. Define what is meant by Competitive Pricing?
- Some firms set their prices the same as their competitors
- This occurs when a firm sets out to destroy (or weaken) the competition through low prices
- this strategy uses a low price to enter the market & gain market share
5. the formula for contribution per unit?
- Fixed Costs ÷ (selling price per unit- variable cost per unit)
- selling price per unit- variable cost per unit
- Variable cost x fixed costs + profit
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