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Discuss the main factors which influence the prices Which firms set for their products.
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- Words:
- 1392
- Submitted:
- Mon Jun 19 2006
... Discuss the main factors which influence the prices Which firms set for their products The objective of the firm is very important in determining how they are to set their prices. Their objective could be, for example, to either maximise profit or to raise market share. Whatever their objective there are many factors which can influence the firms when setting their prices for their products. Some of these methods of pricing can have their advantages on the consumer, however there are many occasions where pricing decisions can have negative effects. In what follows, you will be able to see examples of both of these. Market structure as well as the firm's objective is very important and often influences firms pricing. For a monopolist, prices will be higher relative to costs than for perfectly competitive markets. In perfect competition prices would be determined by the forces of demand and supply, however in reality
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