Final answer:
Darrell is concerned with the 'pricing' element of the marketing mix, which includes assessing costs and desired profit margins to determine the base prices for his chairs.
Step-by-step explanation:
Darrell is trying to determine the base prices and kinds of discounts for the chairs he sells at his furniture store. Darrell is concerned with the pricing element of the marketing mix. When a firm decides on a price, it typically considers two main components. The first component comprises the direct costs associated with producing the product. In the context provided, this would be analogous to the cost of producing pizzas, such as the ingredients and operational expenses. The second part is the company's desired profit, which is a function of various factors including the profit margins inherent to the business sector the company operates within.
Thus, setting prices involves calculating these costs and then adding the desired profit margin to arrive at the final price point. This price becomes part of the firm's supply curve, indicating at what price the firm is willing to supply a certain quantity of the product. Darrell, in setting the prices for his chairs, will need to consider both his costs, perhaps including manufacturing, materials, and overhead, as well as the profit margin he aims to achieve in his specific market.