AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |
Back to Blog
Consumer and poducer8/18/2023 ![]() How does price intelligence benefit market balance? This is where both the demand curve and price intelligence tools prove their worth. Thus, market balance is achieved, allowing a constant production rate to be maintained that meets the user’s needs, while returning sufficient profits to the company.Īs you can imagine, this concept directly affects the prices selected for products in your catalogue. The concept of total welfare determines the most beneficial price for the market and therefore for both parties: the price which improves the consumer’s expectations by being lower than the price they were willing to pay, and which, in turn, is higher than the price at which the producer was prepared to sell for. This reflects the profit margin earned by the producer or retailer, which is a clear indicator of the company’s competitive advantage in the market. On the other hand, producer surplus is the benefit that retailers gain by selling at a price higher than they considered acceptable in their expectations. ![]() ![]() This concept is closely linked to the elasticity of demand and the user’s perception of the product’s value, the type of need it meets, and the social expectations involved in its purchase. Consumer and producer surplus: definitionsĬonsumer and producer surpluses are the concepts that, in microeconomics, relate the needs and expectations of the two parties operating in a market: the buyer and the retailer.Ĭonsumer surplus refers to the benefit to the purchaser of buying a product for a price lower than the amount they were willing to pay. ![]()
0 Comments
Read More
Leave a Reply. |