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Product Pricing

6 May, 2015 - 11:47

price is set at a level which indicates the perceived value agreement between producer and purchaser

Once an organization has its product to sell, it must then determine the appropriate price to sell it at. The price is set by balancing many factors including supply-and-demand, cost, desired profit, competition, perceived value, and market behavior. Ultimately, the final price is determined by what the market is willing to exchange for the product. Pricing theory can be quite complex because so many factors influence what the purchaser decides is a fair value.

It also should be noted that, in addition to monetary exchange, price can be the exchange of goods or services as in a barter agreement, or an exchange of specific behavior, such as a vote in a political campaign.