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Prices are set based on a combination of production costs, consumer demand, and competitive dynamics within the market. Companies aim to achieve specific objectives, such as maximizing profits or market share, by adjusting prices according to market conditions like supply fluctuations and competitor pricing strategies. Additionally, external factors such as economic trends and regulatory changes can influence pricing decisions. Ultimately, effective pricing reflects a balance between company goals and the realities of the marketplace.
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How much faith can a manager place on a transfer price as a substitute for a market price in measuring a profit centers performance?
A manager can have limited faith in transfer prices as substitutes for market prices when measuring a profit center's performance, as transfer prices may not reflect true market conditions or value. They can be influenced by internal policies and may not account for external market fluctuations. While they can provide insights into internal efficiency, reliance solely on transfer prices can lead to distorted performance assessments. Therefore, it's essential to complement transfer prices with external market data for a more accurate evaluation.
What are the functions of prices in a market economy?
Prices are a mechanism by which commodities are efficiently allocated in ideal conditions; prices send a signal about the value of a commodity.
Which economic system has relative prices change to reflect changes in supply and demand for different commodities is known as a?
Price or market system
Describe the concept of market efficiency what are the three different levels of market efficiency?
Market efficiency refers to the degree to which asset prices reflect all available information. The three levels of market efficiency, as defined by the Efficient Market Hypothesis (EMH), are: Weak Form Efficiency: Prices reflect all past trading information, making it impossible to gain excess returns through technical analysis. Semi-Strong Form Efficiency: Prices incorporate all publicly available information, meaning that neither technical nor fundamental analysis can yield excess returns. Strong Form Efficiency: Prices reflect all information, public and private, suggesting that even insider information cannot lead to consistently higher returns.
Why do share prices goes up and down?
Stock share prices reflect the current price of a publicly traded company in the stock exchange, every second of the trading day. The price you see is actually the last transaction made for this stock and it is influenced by many factors such as news, expectations, market conditions, and fluctuations of supply and demand.
What does profits stemming from market power reflect?
high prices
How do you handle prices effectively in your business strategy?
To handle prices effectively in your business strategy, you can conduct market research to understand customer preferences and competitor pricing, set clear pricing objectives based on your business goals, regularly review and adjust prices based on market conditions, and communicate the value of your products or services to justify your pricing strategy.
How would a farmer's market reflect perfect competition?
The willingness of a farmer to sell at different prices regardless of demand will reflect perfect competition.
How much faith can a manager place on a transfer price as a substitute for a market price in measuring a profit centers performance?
A manager can have limited faith in transfer prices as substitutes for market prices when measuring a profit center's performance, as transfer prices may not reflect true market conditions or value. They can be influenced by internal policies and may not account for external market fluctuations. While they can provide insights into internal efficiency, reliance solely on transfer prices can lead to distorted performance assessments. Therefore, it's essential to complement transfer prices with external market data for a more accurate evaluation.
What are the functions of prices in a market economy?
Prices are a mechanism by which commodities are efficiently allocated in ideal conditions; prices send a signal about the value of a commodity.
When does a market behave inefficiently?
Market inefficiency occurs when prices do not reflect the most accurate information available. One example of this is in online trading. There is often a lag between when prices change and the trader receives the information.
What are the objectives of pds?
Objectives::(i) Providing food grains and other essential items to vulnerable sections of the societyat reasonable (subsidized) prices(ii) To put an indirect check on the open market prices of various items and(iii) To attempt socialization in the matter of distribution of essential commodities
How would you define efficient security markets?
The efficient security markets can be defined as a market whereby the prices of the securities fully reflect all the public information at all times. The market efficiency does not require that the market prices be equal to that of the true value at every point in time.
Which economic system has relative prices change to reflect changes in supply and demand for different commodities is known as a?
Price or market system
What factors contribute to the fluctuation of high low stock prices in the market?
The fluctuation of high and low stock prices in the market is influenced by factors such as company performance, economic conditions, investor sentiment, market speculation, and geopolitical events.
What is market insensitivity?
Market insensitivity refers to a situation where investors or market participants fail to react to new information or changes in economic conditions that typically would influence asset prices. This phenomenon can occur due to factors like behavioral biases, market inefficiencies, or a lack of awareness about relevant developments. As a result, prices may not accurately reflect true value or risk, leading to potential mispricing of assets. Understanding market insensitivity is crucial for investors looking to exploit opportunities or mitigate risks.
Describe the concept of market efficiency what are the three different levels of market efficiency?
Market efficiency refers to the degree to which asset prices reflect all available information. The three levels of market efficiency, as defined by the Efficient Market Hypothesis (EMH), are: Weak Form Efficiency: Prices reflect all past trading information, making it impossible to gain excess returns through technical analysis. Semi-Strong Form Efficiency: Prices incorporate all publicly available information, meaning that neither technical nor fundamental analysis can yield excess returns. Strong Form Efficiency: Prices reflect all information, public and private, suggesting that even insider information cannot lead to consistently higher returns.
