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.
Declines within the equilibrium marginal revenue product of a firm’s workers are probably to follow the adjustments to: (1) increases in specific training. (2) decreases in the wage rate. (3) increases in the demand for output. (4) hikes in the
When a firm hires an additional worker who adds $100 worth of output daily, and adds $50 daily to the firm’s costs, in that case the firm must: (w) hire more labor. (x) hire less labor. (y) not change its employment of labor. (z) sell off some o
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
The entire given can be used to calculate average profit except: w) marginal profit minus marginal cost. x) total profit divided by quantity. y) average revenue minus average total cost. z) price minus average total cost.
Workers who keep their jobs will be more productive after firms adjust to raises in: (1) competition in an industry. (2) wages. (3) technological advances. (4) capital costs. (5) government regulation. Hey friends please give your
Explain the role of demand factor in pricing briefly.
When we try to list labor supplies from least elastic to most elastic, in that case the most accurate ranking would most likely be: (1) competitive firm, minute industry, highly skilled occupation. (2) economy, skilled occupation, competitive firm wit
Illustrates the Demand function of a commodity?
The substitution effect of a small change within the wage rate for this worker most strongly goes beyond the income effect at a wage rate of: (1) $5 per hour. (2) $10 per hour. (3) $10 per hour to $25 per hour. (4) $2
States the determinants of elasticity?
18,76,764
1949920 Asked
3,689
Active Tutors
1438431
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!