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Psychology and Psychotherapy: Research Study

The Dangers of Cost-Plus Pricing

Submission: July 17, 2019;Published: August 01, 2019


Numerous companies-probably the majority-use some form of cost-plus pricing. Costplus pricing can easily lead to pricing mistakes-prices that are too high or too low. Incorrect pricing can cause businesses and companies to fail. Nonetheless managers continue to use cost-plus pricing. Why? Because it is so easy to apply even though it usually produces the wrong prices. Consider the worst case of cost-plus pricing: full cost-plus pricing. Full cost-plus pricing can easily lead to serious pricing errors.

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