Markup Pricing Theory is a post Keynesian theory that derives the price that the manufacturer sets for his product. The Markup Pricing Theory can be stated in simple terms as the Price (P) is the sum of the average profit per unit sold and the average cost of the product.
P = Average Cost + Markup
In this sample you will understand more about some of the important features of Markup Pricing Theory and its different advantages and uses. You can place your orders with our coursework help team for complete coursework writing projects on any subject and topic you need for your studies. In Marketing, Business Management and other subjects, our assignment writing service will deliver your high grade paper well in time for submission.
Or in other words, the manufacturer sets the price of the commodity but calculating the average costs incurred for manufacturing the product and adds to it the amount that he wishes to earn as a profit in selling it. This theory of pricing by a capitalist is called the Markup Pricing Theory. The costs for production include the prices of the raw materials of the input as well as the processing, labour and production costs. These costs are determined as standard volume output. The amount added by the manufacturer is the profit per unit or Profit/Q. So the Markup is equal to Profit/Q.
Markup = Profit / Q, where Q stands for unit of the product
There could be many reasons for setting the price according to the Markup Pricing Theory. Some of them are:
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