Product costs set a floor to the price;consumer perceptions of the product's value set the ceiling.

Question

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Product costs, including expenses related to production, marketing, and distribution, determine the minimum price that a company can charge for a product without incurring losses. However, the maximum price that consumers are willing to pay is determined by their perception of the product's value, which may be influenced by factors such as brand reputation, quality, features, and competition. Therefore, while product costs provide a starting point for pricing decisions, consumer perceptions ultimately determine the upper limit of the price range that a company can charge.

Product Costs Set a Floor to the Price;consumer Perceptions of the Product's