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The price of something is how much you paid for it or how much it costs. Simply put, it is how much the seller will accept for the sale of a product or service.
Today, we express prices in units of local currency, such as U.S. dollars or pounds sterling in the United Kingdom, pesos in Latin America among others.
We express commodity prices as currency per unit of weight of that product, e.g. dollars per ounce.
Less frequently we quote prices in quantities of other products or services. However, this type of barter exchange is extremely rare these days.
We also quote some prices on a customer voucher reward system, such as air miles or trade stamps.
In many prisons and in times of hyperinflation, people quote prices in units of a product such as cigarettes. The same can happen in a black market economy.
“A value that will buy a finite quantity, weight or other measure of a good or service.”
(1) a buyer is willing to pay,
(2) a seller is willing to accept, and
(3) competition allows you to be charged.
With product, promotion and place of marketing, it is one of the business variables over which organizations can exert some degree of control.
In a capitalist economy, market forces, i.e. supply and demand, determine prices. A central authority sets prices in a command economy, that is, in a communist system.
Prices and costs are not the same. Cost is the expense incurred by a commercial entity in creating a product or service. The price, on the other hand, is how much the consumer pays for that good or service.
What is the difference between the cost of making or buying something and the price at which it is sold? It is the surcharge or margin. We call a 100% margin a cornerstone profit margin.
Imagine that you are a customer and pay $25 dollars for an item that costs a company $10 to produce and sell. That product has a $15 surcharge.
In a series of financial transactions, it is common to quote prices specifically.
When setting the price of a loan, for example, we express the cost as the percentage of interest.
The amount of interest borrowers must pay depends on their creditworthiness and the amount of the loan. It also depends on the length of the loan.
The word has many meanings both inside and outside the world of business and finance.
A wanted criminal: when we say “The criminal had a price for his head”, we are talking about a sum of money. Specifically, a reward for catching him and handing him over to the authorities.
Bribery of people: sometimes we use the term when we refer to the point of corrupting people, as in “Every person has a price”.
Sacrifice: we use the word when we can only overcome a challenge with considerable sacrifice. For example: “They finally came out victorious, but at a considerable price.”
Basic Price: is the price a seller gets after deducting all taxes paid by the buyer and adding any subsidies he receives for the sale.
Producer Price: the amount the producer receives from a buyer for a unit of a product or service produced as a final product less any taxes. It does not include transportation costs that the producer may invoice separately.
To find out how much things sell for. For example: “We went for all the price dealers of different vans.”
To establish how much people will have to pay for something you are selling. For example: “We’ve priced our new smartphone at $500.”
We can also use the verb to explain why a product did not succeed in a competitive market. For example: “It got out of the market for its price.”
Some businesses allow buyers and sellers to negotiate the final price of a product or service. These companies have a flexible pricing approach.
If a company does not negotiate prices, it uses a system of fixed prices.
Companies that have a zone pricing system charge different amounts depending on where the customer is located.
Normally, the price depends on how much it costs to ship the goods to the customer.
The United States, for example, may have four price zones. The most expensive is the one furthest from the seller’s manufacturing plant.
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