The strategy of first determining what the market is willing to pay,then subtracting a desired profit margin to determine a desired cost of production is called:

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The described strategy is called target costing, which involves working backwards from a target price to determine the maximum allowable cost of production, while maintaining a desired profit margin. Cost-based pricing involves determining a product's cost and then adding a markup to calculate the selling price. Penetration pricing involves setting a low price initially to quickly gain market share. Skimming pricing involves setting a high price initially to capitalize on initial demand from early adopters.

The Strategy of First Determining What the Market Is Willing