Question

Explain the role of cost in pricing.​

Answer 1

Answer:

In the price setting process, cost data are most important element. Hence, cost must be relevant to the pricing decision and under-estimation and exaggeration must be avoided. ... Demand is at times more important than even cost. If cost is increased, the price is to increase even if the demand does not permit to do so.

Explanation:

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Answer 2

Answer:

Costs should never determine price, but costs do play a critical role in formulating a pricing strategy. Pricing decisions are inexorably tied to decisions about sales levels, and sales involve costs of production, marketing, and administration.