Question
The market price for a product has been $79 per unit, but competitive pressures have reduced the market price to $75. The firm manufactures 18,000
The market price for a product has been $79 per unit, but competitive pressures have reduced the market price to $75. The firm manufactures 18,000 of these products per year at a manufacturing cost of $55 per unit (including $30 fixed cost and $25 variable cost per unit). Other selling and administrative costs for the product are $10 per unit.
a) The firm ignores competitive prices because it has a differentiated product. It uses full manufacturing costbased pricing with a 50% markup. What is the firms price? (Round your answer to 2 decimal places.) firms price: b) The firm ignores competitive prices because it has a differentiated product. It uses cost life cyclebased pricing with a 18% markup. What is the firms price? (Round your answer to 2 decimal places.) |
firms price:
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