Pricing Decisions
Barron's Accounting Dictionary:
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Pricing Decisions
Decisions faced by top management and marketing managers. How much to charge for a product or service depends on a multitude of factors such as competition, cost, advertising, and sales promotion. Economic theory suggests that the best price for a product or service is the one that maximizes the difference between total revenue and total costs. However, in reality, the price charged is usually some form of cost-plus, which is later adjusted for market conditions and competition.
| Price-To-Sales Ratio, Price-To-Book Ratio, Price-Earnings Ratio (p/e ratio) | |
| Prime Cost, Prime Rate, Principal |
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Barron's Accounting Dictionary
Dictionary of Accounting Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.
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