What is the pricing formula for a product?

The pricing formula that is widely used to determine the selling price of a product is based on the relationship between cost and profit. The correct formulation states that price equals cost plus profit. This means that to set a price for a product, a business takes the total cost incurred in producing the product and adds the desired profit margin.

By pricing this way, businesses ensure that they recover all costs associated with producing and selling the product while also achieving an intended profit. This approach is vital for maintaining financial health and sustainability, as it provides a straightforward way to cover expenses and generate revenue.

In practice, this formula allows businesses to adjust the price based on changes in costs or desired profit levels. For instance, if the cost of production increases, the price must also increase (assuming the profit margin remains constant) to maintain profitability.

The other options provided do not accurately reflect this standard pricing strategy, as they either misrepresent the relationship between cost and profit or do not yield a meaningful pricing structure.