4.9 Factors to consider when pricing a product - Word Drop

A price is the amount a business charges for its product. When choosing it, the business must consider the ______ levels of its target customers. Buyers can only pay what they can ______. If customers earn little, a high price can shrink the ______, so fewer people are able to buy. It must also check the prices its ______ charge, because shoppers compare similar products to get the best deal.

The ______ must be lower than the price charged, or the business will make a ______. This includes the materials and labour needed to make the product. The stage of the product ______ also matters, so a product in decline may need a lower price to boost sales.

For a start-up, some of these factors matter more than others. If customers have little spare money, a low price is needed. If costs are high, the price must be high enough to cover them. The owner must ______ which factors matter most in that situation.