Basis for Pricing
Read the following examples. Determine whether each example is based on cost-plus pricing, markup pricing, demand-based pricing, or competition-based pricing.
Joe’s Sandwich company determines the cost of making each sandwich and then adds a certain dollar amount to set the final price.
To undercut its rivals, a new furniture company prices its products below competing brands.
Airlines often price their tickets higher on the weekend because more people are purchasing tickets.
Costco and Sam’s Club add 14 percent of the cost to the cost of the product to set the price.