Calculate the price of the product or service.

Calculation should involve

  • the terminology related to costs (e.g., fixed, variable, overhead)
  • the cost of acquiring or producing the product or service
  • all additional costs (e.g., rent, taxes, labor, insurance)
  • the price charged by competitors for an equivalent product or service
  • the anticipated/projected profit from the sale of the product or service
  • the customer threshold for pricing.

Process/Skill Questions:

  • Why is pricing important to the business?
  • How do businesses determine a price for a product or service?
  • Why is it important to be aware of the target market when determining the price of an item?
  • How do originality and quality affect the price?
  • Why is it a good idea to check the competition before setting prices?