just want to talk about three questions managers should answer when setting regular prices are: What...

just want to talk about three questions managers should answer when setting regular prices are:

What is the company’s target profit?

How much will customers pay?

Is the company a price-taker or a price-setter for this product or service?

Expert Solution

1 Company's Target Profit ?

Answer: Target Price - Target Cost= Tartget Profit. , Target Price represents the maximum allowable price that can be charged for the product or service, it is an estimate of the amount that potential customers would be willing to pay based on their value perceptions.

Target Cost is the maximum unit cost , given an expected volume that a firm can commmit to a product to achiee the compnay's profit objective.

Therefore Target Profit= Target Price- Target Cost.

2. Customers will be willing to pay based on their value perceptions, their needs and expectations for products and services, quality, timelessness and price. Target price should result in an acceptable price to customers as well as an acceptable price to the organization.

3.Company is a price setter for its products and services. Pricing decisons genreally refers to the collective decisions a company makes about what to change for its products and services. There is no universally accepted method of setting prices. Yet pricing decisons can be critical in the success or failure of a business. Prices set too high tend to discourage sales, prices set too low may not cover sales. Organisatons develop price for a product or service to recoup the costs and make a desired profit.

ekkarill92 answered 1 year ago

What are the three basic questions Financial Managers must answer?

What are the three basic questions Financial Managers must answer?What are the three major forms of business organization?What is the goal of financial management?What are agency problems, and why do they exist within a corporation?What major regulations impact public firms?

1 - Setting transfer prices can be especially problematic when: a) Managers are evaluated based on...

1 - Setting transfer prices can be especially problematic when: a) Managers are evaluated based on non-financial factors b) Compensation is tied to the financial performance of responsibility centres c) Centralized decision-making is the organizational norm d) Compensation is tied to the financial performance of the organization as a whole 2. A transfer pricing policy based on market price: a) Maximizes total organizational profit b) Is best because the market price is always objective and easily obtainable c) May result...

I want introduction to talk about the overview of the system of washing clothes, it just...

I want introduction to talk about the overview of the system of washing clothes, it just small program not big project yes it is program language but I just want the requirement of this system, contain an introduction and use case

1. What are the three basic questions Financial Managers must answer?

1. What are the three basic questions Financial Managers must answer? 2.What is the goal of financial management? 3.What are agency problems, and why do they exist within a corporation?

First, answer the following questions: What are the primary consequences of “Culture Talk” when applied to...

First, answer the following questions: What are the primary consequences of “Culture Talk” when applied to Islam and Muslims? Paraphrase, do not quote, but do provide page references.

Define the factors that marketers should consider when setting prices. As a company imagine that you...

Define the factors that marketers should consider when setting prices. As a company imagine that you are going to price a new variant of the shampoo brand

Answer this, What is feedback and how should managers use it when communicating? Give an example...

Answer this, What is feedback and how should managers use it when communicating? Give an example of when you received both positive and negative feedback. Could it have been done differently in each example? Note/ type your answer No hand writting

Managers should answer the following questions when considering outsourcing: How do the company’s variable costs compare...

Managers should answer the following questions when considering outsourcing: How do the company’s variable costs compare to the outsourcing costs? Are any fixed costs avoidable if the company outsources? What could the company do with the freed manufacturing capacity?

Briefly talk about Project Requirements. Your answer should be about 150 words. Use a text box...

Briefly talk about Project Requirements. Your answer should be about 150 words. Use a text box on your spreadsheet for the answer. Use a functional vs non-functional, SMART, etc.

You should be able to answer each of the following questions in a just a few...

You should be able to answer each of the following questions in a just a few sentences. Graphs or figures might be good to include if they help you to make a better argument or to explain your answer more clearly. 3. Grandma promises to sneak you some bourbon while your parents are cleaning up the Thanksgiving dishes, but only if you can impress her with something you learned in your economics class. Carefully explain to Grandma why the short...

Question