Answer: Setting prices high enough to cover manufacturing costs and make a profit.
Explanation: The prices of products are influenced by a number of factors, which includes manufacturing costs, the condition of the market presently and the product quality. While setting prices for a products, an organization need to ensure the price set must cover the costs incurred for the production of the products and profits margins. The implication of a product price not covering costs is that, the business will ultimately fail as a result of the exhaust in the organization financial resources. Several strategies are used to determine price of products by organizations, however which ever is adopted must focus on achieving the financial goals of the organization.
