A manufacturer of shampoo incurs an average cost of P50 per bottle of 200 ml. The competitors price of their own brands of shampoo at P51. It was found out in a survey that the consumers expect the shampoo of this manufacturer to be worth P51.50.

1. With total fixed cost of P500,000, average variable cost of P20 what would be the markup price with a 20% mark-up?

2. If the manufacturer becomes competitive oriented, at how much should he sell it? Why?

3. What if he becomes customer oriented, how much will the shampoo be?

4. If you would be asked to price the shampoo, how much will it be? Explain your answer.