UTILITY, VALUE, PRICING AND PRICE
Utility : is the want satisfying capacityof an item or the attribute of an itemthat makes it capable of wantsatisfaction.
Value : is the quantitative measure of the worth of a product.
Pricing : is the art of translating intomonetary terms the value of the productto the consumers at a particular time.
Price : is the amount of money that isneeded to acquire some combination of a product and its accompanyingservices.
IMPORTANCE OF PRICING
(1) FOR THE ECONOMY : Price is thebasic regulation of the economic systembecause it influences the allocation of the factors of production.In other words the price of theproduct is influenced by the price of thefactors of production.
LAND LABOUR CAPITAL ENTREPRENEURSHIPRent Wages Interest Profits
IMPORTANCE OF PRICING
(2) FOR AN INDIVIDUAL PRODUCT :Price is a major determinant of theproduct’s demand ( elastic / inelastic ).
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| Upload Date: | 06/20/2009 |
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