Cost Models
Most of the decisions you make in a business are related to the costs of your products or services. This is clear since finally the objective of a business is to obtain profits and these are obtained when there is a positive margin between sales prices and costs. On the one hand, sales prices are calculated based on the market. It would be a mistake to set the selling price of a product based on its costs because the costs of a company are very characteristic of its productive structure (whether goods or services), its type of financing, the historical moment of the company and Its objectives while to sell, the price must be competitive and should not differ much at the prices that govern in the market. Some cases differ from this rule. When we talk about an innovation of a product or service, or in the case of a monopoly or oligopoly, or in the case of highly differentiated products, we cannot look at market prices because there is no competition. However, these cases are t...