Pricing

process of determining what a company will receive in exchange for its products

Pricing is the creation of a price. In a market economy the price is made by supply and demand. The suppliers would like to get the price as high as possible and the consumers would like to pay as few as possible. Prices will be built if consumers and salesmen make an agreement of the exchange of goods.

Type of marketEdit

OligopolyEdit

There are many consumers but only a few suppliers.

MonopolyEdit

There are many consumers but only one supplier.

PolypolyEdit

Many suppliers are compared to many consumers. By the low market share of the individual supplier you call it "atomize market structure". You also call this market form competitive market.

Very important factors forEdit

SuppliersEdit

  • Cost of production
  • Amount of the market price
  • Speculation
  • Production facilities
  • Market position of the suppliers
  • engineering progress
  • national sanctions
  • quantity demanded

ConsumersEdit

  • Cost of production
  • Necessity
  • Available income
  • Quality of the product
  • Price of substitute (compensating) goods
  • Price of complementary (additional) goods
  • Quantity of supply

Law of supplyEdit

The supplier will offer more goods, if the market price is rising. (and backwards)

Law of demandEdit

The consumer will demand more goods, if the market price drops. (and backwards)