Underlying every pricing decision is the fact that all costs incurred must be recovered in the long run or the company will no longer be in business.

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This is because if a company consistently prices its products below the cost of production, it will lose money and eventually go out of business. Pricing decisions should take into account all costs involved in producing, distributing, and selling the product, as well as the desired profit margin. Pricing too high may result in decreased demand or loss of market share, while pricing too low may result in profit erosion or inability to maintain quality standards. Thus, recovering all costs in the long run is essential for the survival and growth of a business.

Underlying Every Pricing Decision Is the Fact That All Costs