ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Markup does not take into account the profit you want to make.
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Markup must be sufficient to cover operating expenses and allow profit.
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Markup is not affected by operating expenses.
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None of the above.
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Detailed explanation-1: -The specific amount of markup a business uses depends on its needs, the type of business and the industry it’s in. While some industries mark up the price of their goods and services by a small percentage, others can afford to mark up their goods and services at an exceedingly large amount.
Detailed explanation-2: -Cost-plus pricing, also called markup pricing, is the practice by a company of determining the cost of the product to the company and then adding a percentage on top of that price to determine the selling price to the customer.
Detailed explanation-3: -The amount of markup allowed to the retailer determines the money he makes from selling every unit of the product. Higher the markup, greater the cost to the consumer, and greater the money the retailer makes.
Detailed explanation-4: -Cost-plus pricing, also known as mark-up pricing strategy, is the easiest way to price a product or service. You make the product, add a fixed percentage on top of the costs, and sell it for the final price.