Pricing can be defined as a process of determining the value that is received by an organization in exchange of its products or services.
However, economics has an impact on every moment of our lives because, at its heart, it is a study of choices and why and how we make them.
Scarcity You implicitly understand scarcitywhether you are aware of it or not. Simply put, the world has limited means to meet unlimited wants, so there is always a choice to be made.
For example, there is only so much wheat grown every year. Some people want bread; some people want cereal; some people want beer, and so on.
|5 Economic Concepts Consumers Need To Know||In January,this low frills bearer from India announced that it had slashed its menus on a limited — period sale for 10 lakh seats on all its domestic flights. Spice Jet offered its riders to wing at Rs.|
|What is Economics?||The objectives of pricing should consider: Where manufacturing is expensive, distribution is exclusive, and the product is supported by extensive advertising and promotional campaignsthen prices are likely to be higher.|
|Not what you're looking for?||Such a paper is designed to make a student look more keenly on the issues under consideration.|
How do we decide how much flour should be made for bread? One answer is a market system. Supply and Demand The market system is driven by supply and demand.
This demand means you can charge more for beer, so you can make more money on average by changing wheat into beer than grinding that same wheat into flour. More people start making beer and, after a few production cycles, there is so much beer on the market that prices plummet.
This extreme and simplified example does encapsulate the wonderful balancing act that is supply and demand. The market is generally much more responsive in real life, and true supply shocks are rare — at least ones caused by the market are rare.
Costs and Benefit The concept of costs and benefits encompasses a large area of economics that has to do with rational expectations and rational choices.
In any situation, people are likely to make the choice that has the most benefit to them, with the least cost — or, to put it another way, the choice that provides more in benefits than in costs.
Going back to beer: If demand is high, the breweries of the world will hire more employees to make more beer, but only if the price of beer and the sales volume justify the additional costs to the payroll and the materials needed to brew more.
This extends far beyond financial transactions. University students perform cost-benefit analysis on a daily basis, by focusing on certain courses that they believe will be more important for them, while cutting the time spent studying or even attending courses that they see as less necessary.
Although people are generally rational, there are many, many factors that can throw our internal accountant out the window. Advertising is one that everyone is familiar with. Commercials tweak emotional centers of our brain and do other clever tricks to fool us into overestimating the benefits of a given item.
Some of these same techniques are used quite adeptly by the lotteryshowing a couple sailing a yacht and enjoying a carefree life. This image and its emotional message "this could be you" overwhelm the rational part of your brain that can run the very, very long odds of actually winning.
So, cost and benefits may not rule your mind all the time. Everything Is in the Incentives Incentives are part of costs and benefits and rational expectations, but they are so important that they are worth further examination.Introduction to Economics: Basic Concepts and Principles As a novice, economics seems to be a dry social science that is laced with diagrams and statistics; a complex branch that deals with rational choices by an individual as well as nations — a branch of study which does not befit isolated study but delving into the depths of other subject areas (such as psychology and world politics).
-Shift (right) in demand curve leading to a higher quantity demanded at every price, these non-price determinants listed above Explain the difference between a movement along the supply curve and a shift in the supply curve. Associated with the concept of opportunity cost is the concept of economic rent or economic profit.
For example, economic rent of the printing machine is the excess of its earning over the income expected from the lathe (i.e., Rs. 20, – . PRICING 1 Selecting pricing objective 2 Determining Demand 3 Estimating costs 4 Analysing competitors Costs,prices & offers 5 Selecting pricing Method 6 /5(5).
Pricing Concepts The Concept Of Price Economics Essay.
Home. Pricing Concepts The Concept Of Price Economics Essay. 11 Sep admin. It all started with Spice Jet cut downing its air menus. In January, , this low frills bearer from India announced that it had slashed its menus on a limited – period sale for 10 lakh seats on all its.
Define the modern concept of management, organization and leadership, the integrated approach to these concepts and the theory of contingency. Describe the main tools and decision methods of leadership, as well as the role of communication as a tool in company management.
Explain the role of price in marketing mix. Describe pricing.