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(i) Factors considered in a Pricing Decision There are few factors that need to be considered when setting a price for a good or service: * The price offered by competition. * Pricing to high customers seek elsewhere. * Pricing to low costs may not be covered. * The price the customer is willing to pay. * The elasticity of the product see section (ii). * The power, the company has in pricing its good/service see section (v). (ii) The importance of Price Elasticity This is very important, it measures the sensitivity of the volume of goods /services sold to the price the company charges. A company has to find the elasticity of the good/service sold and set its price accordingly otherwise, charging too high then the number of goods or services sold will drop and vice versa and the costs may not be covered. * A good or service is said to be elastic if the change in price...

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