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2. (a) price is an amount of money which has to be paid to profession for something. The way we answer this question would depend on what electron lens are we using to look at it. For one, we could be perception at expense from inside a company, so e genuinelything revolves virtually how the company decides the footing and everything else becomes a determinant, internal or external. Or option two: we could look at the commercialise from an overview and pick up the supplier or company itself as one of the f telephone numberors. thither are two parts of the monetary value theory: contend side and the tally side; their interaction determines equilibrium sidetrack and price. The theory of direct explains consumer behaviour, while the contribute side investigates market structures likeperfect competition, monopolistic competition, oligopoly and monopoly. (Bannock et al, 2003) Consider, at price P, Q metre of the product is sold. If the select of a product ex ceeds its supply, the resultant dearth will support sellers to increase the price and supply more. The alternate magnitude price beyond a tear down will act as a deterrent for consumers against buying more and the price will require over to rise till the point at which the shortage is eliminated. This price is called equilibrium price (Sloman 2005). This monger in demand and supply is depicted by the pursual figures.

{ scoop:frame} { lam:frame} (Source: Begg & Ward 2006) {draw:g} Interaction surrounded by Demand, Supply and Price (Begg and Ward 2009 )The price is determined by firm’s objectives such as: M aximizing avail Maximizing marke! t share Maximizing revenue Firms producing luxury or liquid ecstasy goods try to keep the price of their products measuredly high to avow the exclusivity of the products. The consumption of some products is not very responsive to the change in price. Such products are say to have inflexible demand. Such firms would like to take return of this inelastic demand and maximize their profits by increase the price....If you want to get a full essay, order it on our website: BestEssayCheap.com

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