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'Although corporate pricing decisions are influenced by many different factors, fundamentally prices will reflect cost and market conditions.Explain and discuss.
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For my essay I have chosen the second option available to me, which is: 'Although corporate pricing decisions are influenced by many different factors, fundamentally prices will reflect cost and market conditions. Explain and discuss. Firms have to know not only about costs, but also about revenues when they make pricing and output decisions. In order to understand the relationship between output, revenues and price, a firm has to know the structure of the market or industry in which it is selling its product. There are various market structures, all dependant upon the extend to which buyers and sellers can assume that their own buying and selling decisions do not affect market price. At one extreme, when buyers and sellers correctly assume that they cannot affect market price, the market structure is one of perfect competition. Whenever buyers and sellers must take into account how their individual actions affect market price, we...
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