Mikey W. Smitty, an emerging musician, is getting ready to cut his first CD. The cost of recording the CD is $3,000 but copies cost $2 apiece and the CDs can be sold for $17 each. He wishes to know how many CDs he needs to sell to break even and what his profit or loss will be if he happens to sell only 170 CDs. Set up the breakeven problem and be prepared to answer questions from the output.
Customary Pricing
There are various types of pricing strategies followed in the market. They are psychological pricing, odd pricing, free onboard pricing, customary pricing, prestige pricing, dual pricing, ruling pricing, negotiated pricing, mark up pricing, etc. each one can be explained as follows:
Multiple Unit Pricing
“Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.”
Mikey W. Smitty, an emerging musician, is getting ready to cut his first CD. The cost of recording
the CD is $3,000 but copies cost $2 apiece and the CDs can be sold for $17 each. He wishes to
know how many CDs he needs to sell to break even and what his profit or loss will be if he
happens to sell only 170 CDs. Set up the breakeven problem and be prepared to answer
questions from the output.
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