Fenton Has Always Used Standard Markups to Determine the Prices

question 22

Essay

Fenton has always used standard markups to determine the prices for his clothing products.You are advising him to change his pricing strategy.What advice would you give Fenton?

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Definitions:

Total Profit

The total income of a business after all expenses and costs have been subtracted from total revenue.

Willingness to Pay

The maximum price a consumer is prepared to pay for a good or service, reflecting its perceived value.

Marginal Benefit

The extra pleasure or benefit gained from the consumption of one more unit of a good or service.

Optimal Quantity

The quantity of a good or service that maximizes a firm's profits or an individual's utility, based on cost and benefit analysis.