The price is the payment or reward received for a service, although there are many ways to receive a payment, the most common way to measure the value of something is by monetary units of a certain country.
In the old days, the value of things was measured based on what they could be exchanged for, and bartering between products and services was common as a form of payment. Currently, the value of a product or service is measured in money, but the price paid is not always the real value, since the price is fixed in a function factors such as: profits, elasticity of customer demand, or the amount and aggressiveness of market competitors, among many others things.
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One factor to take into account when setting the price is the way in which you have the organization the market, in which we sell our product: in a perfect competition, the prices are set by the market; while if it is a monopoly, or the companies have some power in the market, for example by having a strong branding or a loyal clientele, you have a certain control over the sale price, and you can determine, in part, the sale price of your product. The total price, and therefore the profit percentage, will depend on the power of the company, although in some cases, a company may lower prices below the maximum profit, for some strategic reason, such as, for example, to become stronger against the competence.
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The price is the value that a company gives to its product, this will determine the profit that the company will obtain from the sale of profit. The price also reflects other market factors, such as taxes, labor or transportation. The decision of a change in prices, either up or down, must always be made after a detailed study of the causes that motivate it and the impact it may have on the market.
