Determining the Price

 

Determining the Price

 
In order to correctly determine the sales price of a product, you will first need to calculate how much it costs to elaborate one bottle jam. To do this divide your production costs between the total amounts of units you want to produce.

Criteria for price determining
You will need to consider the following:

  • The prices of your competition
  • The demand of the product
  • The acquisitive capacity of the market
  • The payment facilities given
  • The amount of time you are planning on recovering your investment
  • The type of competition you are facing
  • The particular characteristics of the product

Determining the point of equilibrium
The point of equilibrium is the minimum amount of units that need to be sold in order to cover the production costs. If it goes above this level, the company obtains utilities; if it goes under, the company loses.

Knowing the point of equilibrium allows you to know the minimum amount of units you need to produce, study the possibilities of varying the price, planning the sales and utilities, and how much money you will need.

 

 

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