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Published by: callmeastha on Jan 27, 2013
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02/05/2013

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(a) Cost Plus pricing In cost plus pricing all the costs – variables and fixed are taken into

account to fix the price. A standard mark – up is determined which is then loaded to set the price.

Advantages (a) Simple and quick (b) Dose not require extensive analysis of cost behaviours (c) Provide transparent basis of price determination particularly when guided by outside control like B.I.C.P. for drug formulation etc.

Disadvantages

(a) Ignores market forces of competition (b) Ignores opportunity cost (c) Not sensitive to capacity bottlenecks.

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