Question

*Please give me a detailed answer with a paragraph or two for the below information*

Is the Right Price a Fair Price?

Prices are often set to satisfy demand or to reflect the premium that consumers are willing to pay for a product or service. Some critics shudder, however, at the thought of $2 bottles of water, $150 running shoes, and $500 concert tickets.                   

Take a position: Prices should reflect the value that consumers are willing to pay versus prices should primarily just reflect the cost involved in making a product or service.

What is your position on the way companies price their products for consumers? Is the price you see a fair price?

Answer 1

As per my opinion, price should be based on the value at which customers are willing to pay for products or services.

Price should be based on demand & supply. As this always try to achieve equilibrium where quantity of goods & services matches the demand of corresponding market & it's ability to acquire the goods & services. This allows price adjustment as market condition change.

Price is the value of the benefits that business provides for its customer and it should not be the cost involved in making a product or service. Cost plus pricing ignores market positioning and only focused on profit margin.

Hence right price is a fair price than it's cost price.