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Business Studies · 2024 · 4 marks
CBSE 2024 · Region 2 · Set 2 · Q30
Ashwin was a fashion designer. On losing his job, he decided to sell the
designer clothes online under the brand name ogue . The garments
were made of good quality fabric with intricate designs and skilled
craftsmanship, making them expensive to produce. Realizing that the
online market is very competitive, he decided to charge a reasonable price
for the garments. The price would cover the cost of production and sale of
garments as well as give him $\displaystyle 10$% margin over and above the cost.
Identify and explain two factors affecting the price determination
discussed in the above case.
Marking-scheme solution
Following are the two factors affecting the price
determination:
(i)
Product cost
The cost sets the minimum level or the floor price at which
the product may be sold. Generally, all marketing firms
strive to cover all their costs, at least in the long run. In
addition, they aim at earning a margin of profit over and
above the costs.
(ii)
Extent of competition in the market
The price will tend to reach the upper limit in case there is
lesser degree of competition while under conditions of free
competition, the price will tend to be set at the lowest level.
Competitors’ prices, their anticipated reactions, quality and
features of the competitive products must be considered
before fixing the price of a product.
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CBSE Class 12 Business Studies past-paper question from the 2024board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.