You are to assume the roles of the financial analyst at FRESHPACK INC., a company that sells food products. The owner of the company plans to launch a seven-meal weekly bundle and asked your team to explain how various economic concepts can affect pricing decisions.
The owner of FRESHPACK INC. wants to launch an all new seven-meal weekly bundle that will help customers with meal planning and preparation for an entire week. The variable costs per bundle are estimated at $30.00, which includes ingredients and labor costs. The fixed costs per bundle are allocated at $15.00 for rent, salaries, utilities, etc. The full cost is $45.00. The cost-plus target price is $64.50. However, a competitor sells similar bundles at $54.50 – $62.50.
The owner wants you to explain the various economic concepts and how it impacts determining the price of products and the amount to produce and sell to its customers/consumers.
The owner wants your presentation to include:
• Provide differences between economic goods and services and their effect on business.
• Summarize economic utilities created by business activities.
• Explain the concepts of supply and demand, using an example.
• Describe the functions of prices in markets and how price setting may be important to various stakeholders.
• Describe at least two economic/socio-economic factors that may complicate the pricing decision of the bundles.
• Provide two options for the owner to consider when pricing the seven-meal bundles.
