4 ms·
Pricing in the market economy is not based on cost of production. It's just one limiting factor for a price. Pricing is based on value for customer (value is he
by nabla9 5y ago
Pricing in the market economy is not based on cost of production. It's just one limiting factor for a price. Pricing is based on value for customer (value is here determined as willing to pay).
Ford knows their customer base. They divide them into segments based on their income/needs. Those who can pay more, must get something more. Higher price segment generates bigger profit margins.
Maximizing the amount of money you can squeeze from the consumer is both art and science.