Final answer:
The claim that profit is the biggest consideration in setting a target sales price is false, as businesses need to balance multiple factors, including costs, market demand, and competition.
Step-by-step explanation:
Profit is a fundamental consideration in setting a target sales price, but it's not the sole consideration. The statement that profit is the biggest consideration in setting a target sales price is false because there are various factors that businesses must take into account. These factors include the cost of production, market demand, competition, customers' perceived value, and overall market conditions.
For example, each business tries to earn a profit which is calculated as Profit = Total Revenue - Total Cost. Thus, setting a price for a product involves considering both the cost of production and the desired profit. In a perfectly competitive market, a firm can sell as much as it wants at the prevailing market price, and its total revenue is the product of the quantity sold and the price charged. Therefore, maximizing profit involves finding a balance between cost, revenue, and market conditions.