Question

3. Identify and discuss two of the main reasons why firms become so infatuated with pricing and give a real world example of each.

*******Please be thourough and please do not use images for the answer.

Answer 1

1) Aim more profits

The firm's main aim is actually to make more and more profits with which they run with such a motto. This makes them so infatuated with pricing and they'll choose certain optimal pricing strategies with which they can make more profits Eg - Psychological pricing enabled companies like Bata to make more profits

2) To sustain competition

One of the important factors of the firm is to sustain a healthy competition where the pricing is the main factor that decides it's completive benefit.

For example- Amazon will not increase it's price as many other sites takes advantage of that and earn profits.