Cost-plus pricing is a straightforward pricing strategy where a business determines the cost of producing a product and then adds a specific markup to ensure a profit. For example, if a company spends $50 to make a product and decides on a $20 markup, the selling price would be $70. This method is popular because it guarantees that all costs are covered while providing a clear profit margin. This pricing approach is commonly used in industries like $manufacturing and $construction, where costs can be easily calculated. However, it may not always consider market demand or competition, which can lead to prices that are either too high or too low compared to similar products.