General Pricing Strategies

Cost-based pricing is the act of pricing based on what it costs a company to make a product.

Demand-based pricing is any pricing method that uses consumer demand - based on perceived value - as the central element.

Competition-based pricing describes a situation where a firm has a pricing policy that reflects the pricing decisions of competitors.

Markup pricing is a strategy in which a company first calculates the cost of the product, then adds a proportion of it as markup.

Profit maximization analysis is the process by which a firm determines the price and output level that returns the greatest profit.