Final answer:
When setting prices of products, businesses want to make sure they can cover their costs and make a profit by adding a markup to the cost of production.
Step-by-step explanation:
When setting prices of products, businesses want to make sure they can cover their costs and make a profit. This means that the price of the product should be set higher than the cost of producing it, allowing the business to earn money from sales.
For example, if a business incurs costs of $10 to produce a product, it would set a price higher than $10 in order to earn a profit. The difference between the price and the cost is known as markup.
By setting prices that cover costs and include a markup, businesses can ensure that they are financially sustainable and able to continue operating.
Learn more about Setting prices of products in business