Question

If sugar cost to produce a can of coke increase, will the coca-cola company increase the...

If sugar cost to produce a can of coke increase, will the coca-cola company increase the price's on their products to compensate for the price increase? OR ANY COMPANY IN GENERAL, APPLYING THAT SUPPLY COST INCREASED?

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Answer #1

The answer to the above question depends on the approach of the company. There are two approaches regarding price increases which arementioned below:

- A company can increase its selling price when the variable cost to produce the can of coke increases(sugar is a variable cost). This will help it to recover the additional cost.

- It can look for ways to cut costs in the manufacturing process so that it can maintain the same level of cost and not lose out consumers due to the increase in price.

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