Question

Krizia is excited about her bakery that she just started. As a marketing major, Krizia knows that setting the correct price will be critical to the success of her bakery. In particular, Krizia wants to get a very good grip on costs, as she knows costs establish the ___________ for her prices.

Answer 1

Answer:

... costs establish the base for her prices.

Explanation:

Usually most small businesses use the cost-based pricing method. This pricing method uses mark-up pricing, e.g. your total costs are $10 per unit and your mark-up is 25%, therefore your final selling price will be $12.50.

This pricing method is the most simple and practical method especially for small businesses although large corporations also use it as well as most contractors, both private and public.