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Retail / Cost-plus pricing

Cost-plus pricing

Cost-plus pricing is a pricing method commonly used by firms. It is used primarily because it is easy to calculate and requires little information. There are several varieties, but the common thread in all of them is you first calculate the cost of the product, then include an additional amount to represent profit. Cost-plus pricing is often used on government contracts, and has been criticized as promoting wasteful expenditures.




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