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Explain two factors that a business should consider when deciding on the selling price for a product - Junior Cycle Business Studies - Question 1 - 2019
Question 1
Explain two factors that a business should consider when deciding on the selling price for a product. 1. 2.
Worked Solution & Example Answer:Explain two factors that a business should consider when deciding on the selling price for a product - Junior Cycle Business Studies - Question 1 - 2019
Step 1
Production cost
Answer
A business must evaluate the production costs involved in making the product. This includes the costs of labor, raw materials, and overhead expenses such as utilities and rent. Understanding these costs is crucial for setting a price that ensures profitability while remaining competitive.
Step 2
Price of competing products
Answer
It is essential for a business to analyze the prices of competing products in the market. By comparing competitors’ pricing strategies, a business can position its product competitively, deciding whether to price higher due to perceived value or lower to attract budget-conscious consumers.