Pricing Is an Important,but Complex and Difficult Task

question 54

Essay

Pricing is an important,but complex and difficult task.Define optimum price and briefly describe the four key factors for determining an optimum price.

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Definitions:

Annual

Relating to or denoting a period of one year.

Nominal Rate

The stated interest rate of a financial product, not adjusted for inflation, representing the face value of interest payments.

Real Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing or the true yield on an investment.

Inflation Rate

The tempo at which the widespread level of prices for goods and services heightens, detracting from the ability to spend.