How to solve problems of pricing

How to solve problems of pricing

The prices and pricing – the major factors in market economy. Pricing – process, which purpose to create the final price of service or goods. When studying the disciplines connected with economy often it is necessary to solve problems of pricing. Superfluous will not know an algorithm of their decision.

It is required to you

  • – calculator;
  • – ruler.


1. You will choose the purpose. Study demand then construct the schedule of a curve of demand.

2. Make calculation of production costs. Further calculate the production price, but without studying demand. Then construct the schedule of a curve of the offer and investigate production capabilities.

3. Calculate profitability (profitability), determine production critical volume. Draw the schedule of market price (equilibrium) for different price levels of demand, it will help to determine to you demand price. It has to meet a condition of the fastest achievement of a point of profitability.

4. Basic data about demand volume, costs of conditional and constants and conditional and variables, define for various price levels which received calculations of steps 1-3.

5. Construct five schedules: schedule of demand; schedule of limit income; schedule of average costs gross; schedule of costs of average variables; schedule of costs limit.

6. Analyze the received schedules and define: the outputs – optimum and minimum; type of the market at which the enterprise will work; loss/a profit.

7. Decide on methods and the strategy of pricing. Assess a marketing situation at the moment: taxes; number of intermediaries; demand – decrease/increase; reaction of intermediaries or suppliers to increase/depreciation of products; competitors.

8. Study price levels which are acceptable for the considered enterprise, on different steps of life cycle. At the same time consider a marketing situation at the moment, namely – the flexible prices, raises, discounts, uniform prices. Considering various price options, define revenue.

9. Make the decision on establishment of the final price of the considered products.

Author: «MirrorInfo» Dream Team