Price theory // Economics

Greetings, partner back with you in another delivery in the field of Economics, since the history of mankind, several market systems have been established and their price fixing between those who buy and sell, over time a theory is born of establishing the same price for All buyers, thanks to large-scale retail sales, over time various price trends were analyzed, since today with the age of technology and the advent of the internet, comparative networks linked to wireless systems are at their disposal. Once linked to people, machines, companies, allowing buyers to buy products at negotiable prices, the price will be a unifying or determining factor in the purchase decision, buyer behavior. Price continues to be one of the most important elements in the market share and profitability of a company, so to speak, dear reader, in the market for both bidders and demanders have access to price information and to whom they can get or the option discounted prices.

The scope of the price theory is to analyze according to the supply and demand of the market and its different trends, it is about understanding in a technical and analytical way the demand curve of buyers with their different price levels, price in cost function, to better understand the price, this is an element of the marketing mix that produces income, which also its cost, since the pricing is too cost-oriented, also the prices do not change with the frequency to take advantage of the changes in the market. Most companies have an initial price when developing a new product, where to find out where to position their product in terms of quality and price, there has been competition between the price segments in the search for a strategy to coexist in the market, since The purpose of pricing is first to determine where to position your market offer, for the maximum scope of the market segment, a very important piece of information when there is a reduction in price is reflected in the increase in total income as long as It is of an other elastic and the opposite would be an inelastic demand, thanks to this it is about analyzing the response of buyers to different price changes.

In more technical ways, how the elasticity of the demand or supply is greater than 1, this is elastic, dear reader, the important thing is when the elasticity of the demand is greater, it is reflected in the price levels, on the other On the other hand, the prices of competitors and substitutes serve as an orientation with the cost, which allows us to establish a lower price limit, the most used method to set prices is to add a surcharge of the cost standards of the product.