Answer: Product costs set the floor for product prices.
Step-by-step explanation:
Product cost refers to the costs incurred to formulate and create a commodity.
Product costs set the floor for product prices as they give an overview of how much money and inventory are supposed to be used for maximum profit while using minimum capital. As the primary objective of most companies is to maximize profits and minimize the cost of production, product prices are heavily influenced by various aspects of the production of the product such as materials, labor, inventory, equipment, machinery, etc.
Although some of the above options also contribute to fixing the floor for product prices, product costs hold more weight over the rest of the options.