Question

what are the constraints on pricing of hot cheetos ?

Answer 1

First thing to remember while pricing hot Cheetos is that the production cost have to covered in the pricing. And after that if the producer wants to make a profit out of that then it will depend upon the market constraints.

Second important thing to keep in mind is the price of Substitute good of the Cheetos. If it's price becomes greater than its substitute then the consumer will shift to that good which is cheaper. And a Cheetos company will face a loss.

Thirdly , the price should cover all the taxes and transportation as well as delivery costs. It is also a constraint to the producer.

Lastly the machine used in production will be of no work after few years the company should also keep in view the cost incurred due to this.

.