How might overhead affect the price of a new car?
Answer (2)
If the overheads increase, the price of cars will go up too. If it didn't go up then the company would either be having lower revenue or they would be losing money. This way, they increase the price of the car to negate the increase of the overhead. This might however lead to the lack of demand for a more expensive car so they would certainly have to find a way to go around this.
Overhead costs impact the price of new cars as manufacturers raise prices to cover increased expenses and maintain profitability. Higher prices can affect consumer demand and market competitiveness, prompting businesses to find balance in cost management and pricing strategy. Effective pricing takes into account direct production costs, overhead costs, and competitive market factors.
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