There are many ways that companies set selling price on their goods and services. Some...
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Accounting
There are many ways that companies set selling price on their goods and services. Some of the methods are target cost, target selling price, and cost plus pricing, But, whatever is method used, in the long run the selling price must cover the product cost and earn a profit.
Auto makers such as Ford and Toyota operate in a very competitive market so to earn a profit in this industry companies have to focus on controlling cost since price must be competitive.
As we discussed in class, Tesla, on the other hand, has the electric car which is a new and innovative product. Would you expect Tesla to price cars the same way as Ford and Toyota? Regardless of how Tesla prices their autos, what are some basic business principles they would need to follow?
Explain your response
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