Costs set the floor for prices; the market and demand set the ceiling.

Name: Costs set the floor for prices; the market and demand set the ceiling.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is true. The costs of producing a product or service set the minimum amount that a company must charge in order to make a profit. However, the maximum amount that a company can charge is determined by the market and demand for the product or service.

Costs Set the Floor for Prices; the Market and Demand