--%>
Assignment Help - homework help

External factors in governing prices

What are the external factors in governing prices?

E

Expert

Verified

External Factors are as follows:

These factors are ahead of the control of organization. The given are the major external factors.

1. Demand: when the demand for a product is inelastic this is better to fix a higher price and when demand is elastic, so lower price may be fixed.

2. Competition: Number of substitutes obtainable in the market and the extent of competition and the price of competition and so forth is to be considered during fixing a firm price.

3. Distribution channels: Conflicting interest of middleman and manufacturers is one of the significant factors that influence the pricing decision. So, manufacturer would desire that middleman must sell the product at a minimum mark up.

4. General economic conditions: throughout inflation a firm forced to fix a higher price and in deflation forced to decrease the price.

5. Government Policy: when taking pricing decision, a firm has to take in consideration the taxation policy and trade policies of the Government.

6. Reaction of consumers: When a firm fixes the price of its product unfairly high, the consumer might boycott the product.

   Related Questions in Managerial Economics

  • Q : Define the term cost plus pricing

    Define the term cost plus pricing.

    		•
  • Q : Forecasting demand what are the

    what are the criteria for good forecasting

    		•
  • Q : The Income Effect by Supply of Labor

    Along a supply curve for an individual’s labor, there the income effect tends to rise the: (1) supply of work as wages reduce the number of people a firm will hire. (2) demand for leisure as the wage rate and income raise. (3) l

    		•
  • Q : Wage rate paid for raises labor When

    When the wage rate paid for labor raises, in that case the: (1) supply of labor increases (2) opportunity cost of leisure rises. (3) workers always supply more labor. (4) level of national income increases. (5) opportunity cost of leisure falls.

    		•
  • Q : Negative Relationship in Demand for

    The demand curve for labor can be demonstrated as a negative relationship between: (w) the quantity of labor demanded and the wage rate. (x) labor productivity and the quantity of labor used. (y) employment and output. (z) wages and GDP.

  • Q : Extension/contraction and shift in

    Differentiate between extension/contraction and shift in demand?

    		•
  • Q : Analysis of Costs and Revenue with

    Refer to below figure. Assume that the firm is currently producing Q2units. What occurs if this expands output to Q3units: w) Its profit raises by the size of the vertical distance df. x) this makes less profit. y) this incurs a loss. z) this wil

    		•
  • Q : Human Capital and Wage Differentials in

    If compared along with average high school graduates, in that case average Americans along with college degrees: (1) uniformly earn more at every point over their whole lives. (2) earn more primarily early throughout their careers. (3) earn more, but only later during

    		•
  • Q : Demad elacticty demand function is: QY

    demand function is: QY = -8,000 - 5,000PY + 192A + 120I + 2,000PX (6,000) (1,000) (120) (80) (800) R2 = 91% Here QY is quantity (measured in units) of Product Y demanded in the current period, A is hundreds of dollars of advertising ($00), I is thousands of dollars of disposable income per ca

    		•
  • Q : Most valuable human capital The most

    The most valuable human capital onto the given list would be possessed through a person who: (w) inherited a great deal of money. (x) invested large sums on the stock market. (y) had an advanced degree in music education. (z) specialized like a medica

    		•