What pricing strategy involves setting the price by doubling the item's cost?

The pricing strategy that involves setting the price by doubling the item's cost is known as keystoning. This approach is straightforward and commonly used in retail environments, where a retailer marks up the cost of an item by a specific percentage, typically 100%. By doubling the item's cost, the retailer aims to cover overhead expenses and achieve a profit margin that is simple to calculate.

Keystoning is particularly effective in situations where the market allows for such straightforward pricing and where the retailer wants to maintain a consistent markup across various products. This method can be beneficial for both the retailer, who secures a guaranteed margin, and the consumer, who can easily understand the pricing structure. As a result, keystoning is a practical and widely adopted pricing technique in merchandising.