Posted on by Judy

Prices are often set to satisfy demand or to reflect the premium that consumers are willing to pay for a product or service. Do you believe prices should reflect the value consumers are willing to pay? Alternatively, do you believe prices should reflect only the cost of making a product or delivering a service? Please respond citing a real world example to support your position. please site any references used

There are various ways of pricing
one can be cost based pricing where you add up all the cost in making a product and add a profit margin to it to get price
another can be price based costin which tends to capture the Value a customer is willing to pay to get a product or service for example a BMW car might be priced high because there is a brancd value attached to it and customer is willing also to pay for it
For luxury products prices should reflect the premium the customer is willing to pay but for Necessacity products like food the prices should not.
 
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