How prestige pricing could be used to increase profitability


Discuss the below:

Q: Ponce company is concidering the production and sale of a new product with a fixed cost of $27000 and a variable cost of$5 per unit. Based on the normal profit margins ponse desires to earn $33000 profit, and beleives he can sell 6000 units of the product.

a. based on the information determine the target sales price

b. explain how prestige pricing could be used to increase profitability

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Operation Management: How prestige pricing could be used to increase profitability
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