Describe external and internal factors that influence menu pricing.

The selling price on the menu is not always the same price that is derived from one of the formulas. Other factors must also be taken into account when pricing a menu, including the market, location, economic climate, competition, and the perceived value by the customer. One of the most important ways managers use a menu as a cost control device is to determine if the menu items are priced appropriately. Food costs change, so it is very important that recipe cost cards are updated regularly. If the cost goes up and the selling price is not adjusted accordingly, the standard food cost percentage will not be met and the profit of the operation will be reduced. Portion size must also be controlled or it will impact food cost and profit.