Generally, in a nondifferentiated product market there is little room for price variation from the competition. Any attempt to increase profits in this situation would have to come from reduced costs. For those situations where the product service is unique in the marketplace, the entrepreneur has more flexibility and should have a clear understanding the inherent costs. The importance thing to remember is that there is total cost and margin to
get to the final price. Changing one of these items will impact the other two factors in some manner.