Cost-plus pricing is based on which concept?

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Multiple Choice

Cost-plus pricing is based on which concept?

Explanation:
Cost-plus pricing starts from the cost of making the product and adds a markup to that cost to set the selling price. In practice you look at the cost per unit (the average cost of production) and then apply a markup to cover overhead and desired profit. This approach ensures costs are recovered and a target profit is achieved, rather than pricing tied to demand, competition, or trying to maximize profit purely from market conditions.

Cost-plus pricing starts from the cost of making the product and adds a markup to that cost to set the selling price. In practice you look at the cost per unit (the average cost of production) and then apply a markup to cover overhead and desired profit. This approach ensures costs are recovered and a target profit is achieved, rather than pricing tied to demand, competition, or trying to maximize profit purely from market conditions.

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