FFA Floriculture Practice Test

What is the minimum price above total production and marketing costs for a horticulture product to be feasible?

1. 150%

2. 200%

3. 250%

4. 300%

The correct answer is: 250%

In horticulture, setting a price for a product that exceeds total production and marketing costs is crucial for ensuring feasibility and profitability. The correct choice indicates that a minimum price that is 250% above total production and marketing costs is necessary to cover not just the costs but also allow for a reasonable margin that can account for other expenses such as labor, overhead, and unforeseen costs. This pricing strategy ensures the business can sustain itself: it includes a substantial profit margin that can be reinvested into the operation or saved for future needs. Setting the price too low may lead to covering costs but not enabling growth or financial stability, ultimately jeopardizing the feasibility of the horticultural business. Hence, establishing a minimum price that is 250% over production and marketing costs is a prudent approach to maintain a viable horticultural enterprise.