optimal markup on The optimal markup-on-cost formula can be illustrated through use of a simple example.

cost Consider the case of a leading catalog retailer of casual clothing and sporting equipment that

The pr°fit-maximizmg wishes to offer a basic two-strap design of Birkenstock leather sandals for easy on-and-off

-osdivi<ired1byetheaciijan casual wear. Assume the catalog retailer pays a wholesale price of $25 per pair for Birkenstock

üty 1 pius the price sandals and markets them at a regular catalog price of $75 per pair. This typical $50 profit mar-

elasticity of demand gin implies a standard markup on cost of 200 percent because

Markup on Cost =

Price - Cost Cost

Was this article helpful?

0 0
Your Retirement Planning Guide

Your Retirement Planning Guide

Don't Blame Us If You End Up Enjoying Your Retired Life Like None Of Your Other Retired Friends. Already Freaked-Out About Your Retirement? Not Having Any Idea As To How You Should Be Planning For It? Started To Doubt If Your Later Years Would Really Be As Golden As They Promised? Fret Not Right Guidance Is Just Around The Corner.

Get My Free Ebook

Post a comment