Contribution per unit = SP − VC = $50 − $30 = $20

Break-even point = Fixed Costs / Contribution per unit
               = $20,000 / $20
               = 1,000 units

GPM = (GP / Revenue) × 100% = (80,000 / 200,000) × 100% = 40%

NPM = (NP / Revenue) × 100% = (30,000 / 200,000) × 100% = 15%

Break-even point là mức sản lượng mà tại đó tổng doanh thu
bằng tổng chi phí (total revenue = total cost).

Doanh nghiệp không có lợi nhuận cũng không bị lỗ (profit = 0).

Advantage: Social media allows the business to reach a large number of
customers at a low cost compared to traditional advertising (1 mark).
This is especially effective for targeting younger demographics who
spend significant time on platforms like Instagram (1 mark — applied).

Disadvantage: Negative feedback or reviews on social media can spread
very quickly (1 mark). This could seriously damage the brand image
and be difficult to control, potentially reducing sales (1 mark — developed).

Point 1: Average cost per unit is lower because producing goods
in groups allows the business to benefit from economies of scale
(buying raw materials in bulk reduces per-unit cost).
Apply: For example, a bakery producing 100 loaves per batch pays
less per loaf than producing them individually. (3 marks)

Point 2: Batch production is more flexible than flow production
because the machinery can be re-set between batches to produce
different products, allowing the business to respond to changes
in customer demand. (2 marks)

However: There is downtime between batches while machinery is
reset, which means workers and equipment are not being used
productively during this time. (1 mark — counter-argument)

I recommend penetration pricing for the following reasons:

Point: The app market is highly competitive with many alternatives
available to customers at low or zero cost.

Explain: Setting a low introductory price will attract a large number
of early users quickly, building a user base before competitors respond.

Apply: Since the business is small and unknown, customers are unlikely
to pay a premium price for an unfamiliar brand, making skimming
unsuitable at this stage.

However: If the app offers truly unique features with no direct
competitors, skimming could recover development costs faster.

Conclusion: Overall, penetration pricing is the better recommendation
for a small, unknown business entering a competitive market, as it
prioritises customer acquisition over short-term profit margins.