What is the price?

In economics there are many definitionsthe concept of "price", but among ordinary people, that is, ordinary citizens, like you and I, this concept is treated unambiguously. We go to the store, we see the price list, the price is written on it. So, the answer to the question, what is the price, for us - the amount of money that must be paid for a particular product. This is understandable to all. There is a product - there is a price, so you can buy it for a certain amount. This is also called the cost of goods. These two concepts have differences that economists know, and even then not all. In simple terms, the cost is a price per unit of goods. But for all ordinary people, price and value are one and the same.

What determines the price

Of course, in the first place, the price depends onproduction costs. A space rocket can not cost the same as bread. The difference in costs does not detract from the merits of bread, but it is also clear to the child that more effort is needed to produce the rocket. The cost of production can include the cost of raw materials. If it is produced by the bakery itself (in the case of bread it is the own grinding of grain into flour), then it takes into account the cost price of flour. If flour is bought, then the cost price of bread includes the cost of flour. Also, the cost of the product adds to the cost of electricity, the wages of workers, the depreciation of equipment (to pay back the money spent on the purchase of machines and appliances), the lease of land and premises. All this, spent for a month, develops, is divided into the number of loaves produced for the same period, a commercial margin of at least 20% is added. In the end, we have a price for one loaf of bread.

Also the price depends on the demand for the goods. If there is not enough bread, the price of one loaf will soar at times. Even theoretically it sounds scary. Therefore, everything related to the prices of essential goods is controlled by the state.

But competition has a beneficial effect on price. The more firms will produce the same bread, the stronger they will want to win the market. And the strongest weapon in the struggle for the buyer is a price reduction. Sometimes firms are so addicted to this process that they expose the price lower, two or more times lower than market value, this process is called dumping and is prosecuted by law.

Demand price

After we considered what the price isgoods, you should tell about some types of prices. Sellers especially should pay attention to what is the price of demand. After all, as often happens: demand grows, and sellers artificially inflate the price. For example, under the New Year, the demand for Abkhazian mandarins increased. Sellers raised their price from 55 to 70 rubles. The price lasted a week, and sales stopped. What happened? The demand price was exceeded. That is, buyers correlated the proposed price and the benefits obtained from the purchase of tangerines, and switched to mandarins of Morocco. Now it became clear what is the price of demand?

Market price

It is quite simple to understand what a market price is. This is the average price for a certain type of product on the market. There is beef at 370 rubles in the early morning and at 300 in the evening. So, the market price of beef is 335 rubles. This determines the market price of any product. And "market" is only a place where sellers sell merchandise. The market is a world space, influenced by many factors that also affect the price.

Consumer price index

This cunning concept was invented by economists,to monitor inflation. Let us explain how the price index is formed. What is a consumer basket? This is the minimum set of products to survive. It includes both food and industrial products. For example, it cost in January 5000 rubles, and in February 5500. The growth of its price, and hence the consumer price index, was 10%. Hence, inflation for the month is 10%. God forbid us such happiness! For 2012, inflation was only 6.5%.

Value of division

The price of division we studied in physics lessons in the sixthclass, remember? For those who forgot, I recall that such a division price: this is the minimum amount of what we measure and see on the device. For example, on a thermometer, which we measure the temperature of the body when sick. The division price is 1 degree Celsius. In the oven, where the Christmas cake is baked, the price of division is 10 degrees. On the clock, the division price is 1 minute.

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