Question

decision point: finding the right price
youve invested a lot in moondogs -- now you need to find the right price to charge for your coffee. it has to be low enough to attract business, but high enough to ensure you make a profit. whats a good step in figuring out the right price?
select an option from the choices below and click submit.
run an online survey of students to determine what price they would like to pay.
visit several shops that sell coffee near campus to see what prices they charge, and then use the average of those prices to set the price you will charge.
use the principles of supply and demand to determine the market (or equilibrium) price.

Explanation:

To determine the right price for coffee in a business context, using supply and demand principles (from Economics, a Business subfield) is ideal. Supply - demand analysis helps find the equilibrium price where quantity supplied equals quantity demanded, balancing attracting customers and making a profit. Surveying students (about willingness to pay) or averaging competitor prices are less comprehensive. Supply - demand considers market forces for optimal pricing.

Answer:

Use the principles of supply and demand to determine the market (or equilibrium) price.