Price

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Price

Meaning

Price refers to the amount of money that a buyer pays to acquire a product or service. It represents the value set by the seller and accepted by the buyer.

Example :

For example, if a shirt is priced at ₹800, the buyer must pay ₹800 to purchase it. Additionally, airline tickets tend to cost more during holiday seasons due to increased demand.

How to Understand :

1. Price serves as a signal—higher prices indicate scarcity, while lower prices suggest abundance.

2. It reflects the value that customers perceive in a product, including aspects like brand, quality, and usefulness.

3. Price helps balance demand (how much people want) and supply (how much is available); changes in price can affect customer behavior.

4. Various pricing methods include cost-based (based on production costs), value-based (based on perceived value), competition-based (based on competitors' prices), demand- based (based on consumer demand), and dynamic pricing (prices that change based on demand).

Importance :

1. Price is crucial for determining a business's revenue and profit margins.

2. It influences consumer choices—people often compare prices before making purchases .

3. Price helps in market positioning, distinguishing between premium and low-cost brands.

4. It controls the demand for a product, influencing how much is bought .

5. Price guides economic decisions related to production and investment strategies .

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

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Price Meaning

Example :

How to Understand :

Importance :

Price

Meaning