Pricing Methods

Cost-based pricing involves calculating the cost of the product, and then adding a percentage mark-up to determine price.

Demand-based pricing uses consumer demand (and therefore perceived value) to set a price of a good or service.

Competitive-based pricing occurs when a company sets a price for its good based on what competitors are selling a similar product for.

The break-even point (BEP) is the point where expenses and revenue intersect.