price

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Price

Meaning

Price is defined as the monetary amount that a buyer pays to obtain a product or service. It reflects the value assigned by the seller and accepted by the buyer.

Example :

For instance, a shirt priced at ₹800 indicates that the buyer must pay ₹800 to acquire it. Additionally, airline tickets often cost more during holiday seasons due to heightened demand.

How to Understand :

1. Price functions as a signal - high prices indicate scarcity, while low prices indicate abundance.

2. It reflects the value that customers attribute to a product, considering factors such as brand reputation, quality, and usefulness.

3. Price helps balance demand (the desire for a product) and supply (the availability of the product); changes in price can lead to shifts in consumer behavior.

4. Different pricing strategies include cost-based (determined by production costs), value- based (based on perceived value), competition-based (informed by competitors' prices),demand-based (driven by consumer demand), and dynamic pricing (where prices fluctuate based on demand).

Importance :

1. Price is vital for determining a business's revenue and profit levels.

2. It influences consumer purchasing decisions, as individuals often compare prices before buying.

3. Price aids in market positioning, distinguishing between premium and budget-friendly brands.

4. It regulates the demand for products, affecting sales volume.

5. Price guides essential economic decisions related to production levels and investment opportunities.

6. It serves as a measure of perceived value, indicating how much consumers are willing to pay for a product.

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Price Meaning

Example :

How to Understand :

Importance :

Price

Meaning