--%>
Assignment Help - homework help

Explain the role of demand factor in pricing briefly

Explain the role of demand factor in pricing briefly.

E

Expert

Verified

In the case of pricing of a product, demand plays a significant role. In several cases demand occupies a very important role than cost. A demand is the factor which finds out the sales and profit. We identify as per law of demand, demand and price have inverse association. To raise the demand, the firm has to reduce the price. Likewise to decrease the demand the firm has to raise the price. There elasticity of demand is to be considered with determining the price of the product. When the demand for the product is elastic, the firm can fix lower price. When the demand is inelastic then the firm can fix a higher price.

   Related Questions in Managerial Economics

  • Q : Price and output decisions in

    Illustrates the price and output decisions in Monopolistic Competition?

    		•
  • Q : Determine shape of total revenue curve

    Within a graph along with output on the horizontal axis and whole revenue on the vertical axis, determine the shape of the total revenue curve for a perfectly competitive seller: w) U-shaped. x) inverted U-shaped. y) a horizontal line

    		•
  • Q : Determine marginal resource cost of

    If hiring hundred extra workers increases the firms total cost through $10,000, and each extra worker increases output from 50 units, in that case on the average: (w) profit will fall by $10,000. (x) the value of the marginal product of labor is $10,0

    		•
  • Q : Function of Profit Maximization in

    For a purely competitive firm operating within a competitive labor market as: (1) the marginal resource cost of labor exceeds the wage rate. (2) the supply of labor is perfectly inelastic. (3) total labor costs are independent of the

    		•
  • Q : Persuade competitors by cartel member

    When a cartel member can persuade competitors to keep the cartel price but secretly give a discount price to certain customers, profits will rise: (w) for all members of the cartel. (x) since price cuts are only given to assigned customers. (y) as a result of an incre

    		•
  • Q : Increases in labor force participation

    When this purely competitive labor market is primarily in equilibrium at D0L, S0L, a move to equilibrium at D0L, S1L would be probably to follow from increases in: (w) rates of technological advance. (x) the cost of living. (y) labor force participati

    		•
  • Q : Income effect of a small wage rate

    The income effect of a small change within the wage rate for that worker most strongly exceeds the substitution effect at a wage rate of: (1) $5 per hour. (2) $10 per hour. (3) $10 per hour to $25 per hour. (4) $25 pe

    		•
  • Q : Value of the Average Product Hulk is a

    Hulk is a fitness counselor who coaches five clients at a time during exercise groups at Beefcake Body Builders. Hulk’s hourly wage is of $17, and Beefcake charges his clients $20 for every hour-long conditioning session. Therefore average value of produ

    		•
  • Q : Equilibrium point on the resource

    An equilibrium point on the resource demand curve of a competitive firm operating within a competitive labor market would indicate equality among the resource price and: (w) demand elasticity. (x) quantity demanded. (y) VMP of the resource. (z) output

    		•
  • Q : What are the important areas of

    What are the important areas of decision-making?

    		•