Monday, April 6, 2009

Price=MC

Can some economist straighten this out for me?

setting price to marginal cost yeilds the greatest... income? because at this price the most people will want to buy. any higher and the people won't want to buy as much, and any lower you aren't making enough per unit.


but from my standpoint this is the old "volume" approach to selling. and if we were to set the price this way where would we see profit? It would be a world where we'd keep selling and selling and never see any thing go into our banks.

we can just sustain ourselves? do I have this right, asmice?

2 comments:

aSmiCe said...

eh...why suddenly thinking about price setting?

of corse price only can be set within the range of supply from the business side and demand from the market side..and being influenced by the competitors in the same field.

If you are able to provide something with lower cost, or you achieve economic of scale with the large volume, or you can produce values more than other product, you deserve a higher profit. That is very much based on your core competencies and capabilities.

Simply crapping anyway.

aSmiCe said...

hey, why not you come out with a post about yourself? Don't really know you.