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Cost plus pricing is based on full product cost plus desired profit margin to arrive at the product price, while marginal cost plus pricing makes use of the product's total variable cost plus desired profit margin to arrive at the product's price. Marginal cost plus pricing (or "mark-up pricing) is based on demand, and completely ignores fixed costs in arriving at the product's price.

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Q: What is the difference between cost plus pricing and marginal pricing?
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Related questions

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The main difference between standard cost and marginal cost is that in standard cost a target is set and in marginal cost there is no target set. Marginal cost is the change of the total cost due to the quantity produced.


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