1. Which of the following is more likely to be consistent with the aim of maximising profits: pricing on the basis of (a) cost per unit plus a variable percentage mark-up; (b) cost per unit plus a fixed percentage mark-up.

2. Explain the differences in the importance attached to the different factors leading to price increases from those leading to price reductions.

3. Why, do you think, percentage price changes are bigger than the rate of inflation?