Explain the objectives of pricing policy and its aim
Explain the objectives of pricing policy and its aim.
Expert
Pricing decisions are generally considered a part of the general strategy for getting a broadly defined purpose. Before finding out the price itself, the management must decide the objectives.
When setting the price, the firm may intend at one or more of the given objectives.
1. Profit maximization: as the primary motive of business is to earn maximum profit, pricing all the time aim at maximization of profit by maximization of sales.
2. Market share: For increasing market share a firm may lower its price within relation to the product of competitors.
3. Target return in investment: The firm must fix the price for the product in a way that this will satisfy expected returns for the investment.
4. Prevent or Meet competition: with the aim of discourage competition a firm may adopt a low price policy.
5. Price stabilization: The other objective of pricing is to stabilize the product prices over a given period of time.
6. Resource mobilization: In this company may fix their prices in a way that adequate resources are made accessible for the firm’s developmental, expansion investment and so forth.
7. Speed up cash collection: Several firms try to set a price that will enable rapid cash recovery as they may be financially tight or may regard future is more uncertain to justify patient cash recovery.
8. Growth and Survival: A significant objective of pricing is survival and getting the expected rate of growth. Profit is less significant than survival.
9. Prestige and goodwill: Pricing also intends at maintaining the prestige and improving the goodwill of the firm.
10. Getting product: quality leadership, Several Companies intend at establishing product quality leader by premium price.
Within a purely competitive labor market, there the firm: (w) sets the wage that the household should accept. (x) should accept the wage demanded by the household. (y) and household arrive at the wage by bargaining. (z) and household should take the e
Firing a worker who regularly goods off and calls in sick may not resolve the moral hazard problem of shirking when: (w) there is a high probability which the worker will sue the firm. (x) the local unemployment rate is high. (y) average worker productivity is low. (z
Explain the Cross elasticity of demand.
Illustrates the Modern Definition?
States the Scarcity Definition in economics?
Completing your degree is probably to be a significant signal which will help you secure a well-paid job along with a bright future if potential employer: (1) want to ensure that job applicants have already obtained important amounts of specific human capital. (2) use
Explain the infinitely elastic demand.
What is Constant Returns to scale?
The Real Kool Toys Company manufactures and sells educational toys. An empirical demand function for one of the firm's products has been estimated over the last 21 quarters using regression analysis. The estimated demand function is: QY = -8,000 - 5,000PY + 192A + 120I + 2,000PX (6,000) (1,000)
Illustrates the term long run production function?
18,76,764
1921823 Asked
3,689
Active Tutors
1427935
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!