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4 answers

Profit margin

2006-12-06 00:34:59 · answer #1 · answered by kevin_4508 5 · 0 0

well the 1st answer is the correct college answer for an economics class but to break it down real quick.. example..if I owned a company that makes sweatshirts i would need what?..people to make them and the material to make the sweatshirts...well if i am real cheap I would either hire and only pay minimum wage or have my company in some poor country so i could get the people and the material real cheap too..anyway it may only end up costing me $8 bucks to make the sweatshirt but by the time it gets to the Department or Sports store it will cost $65 bucks why....because it's called "overhead" and profit....overhead is how much more will it cost me to make this..well i need a building...machines....electricity...a payroll person...health insurance to pay all these people and a boss or two....so now instead of $8 we increase the actual price of what you will pay....and that is why most companies like say NIKE will do big time expensive advertising because then the word gets out about this great company everyone sees in the paper or on the TV...so now everyone has to get them...the Company has now hit the lottery!! and sometimes the price will increase because now there is a ig demand...like those stupid x-boxes....

2006-12-06 02:22:29 · answer #2 · answered by TWISTER 4 · 0 0

Alternatively, cost is the total money expended in producing and delivering an item; price is what you get paid for it.

2006-12-06 01:06:26 · answer #3 · answered by JJ 7 · 1 0

cost is how much the seller paid for the item
Price is how much the consumer pays for it.

2006-12-06 01:04:06 · answer #4 · answered by jmrolland_4 2 · 1 0

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