ABSTRACT
Although some costs are beyond the firm’s control, certain features of costs and selling price are wholly or partly determined by the firm’s own decisions. As discussed in previous chapters, costs of energy and commodities are determined by international and national market forces. Interest rate costs and taxation bearing on a business and its customers are inevitably beyond the firm’s control.
Yet even where labour costs, for example, are largely determined by national and local market forces a firm can adopt a flexible policy towards pay and incentives that enables it to exercise a fair degree of control over its cost of labour.
