Factors Affecting Price

Buyers and many sellers

all dealing in an identical

product. Neither producer

nor user has any market

power and both must

accept the primary market

price.

One seller who dominates

many buyers. The

Monopolists can use this

market power to set a

profit-maximizing price.

Large number of suppliers

offer similar but not

identical products. These

slight differences give

monopolistic power to the

supplier.

Relatively few competitive

companies dominate the

market, with each company

having the ability to

influence the market price.

Total cost of materials, energy

and labor to produce a

good/service.

Since pricing affects if and how

much of a good/service a customer

will buy; the price will also be part

of the decision to make/sell certain

products.

Shipping long distances can cause

the price of the product to rise.

Understanding this cost and what

customers are willing to buy are part

of the decision in distribution.

When determining price and

promotion plans, businesses have to

consider the type of market and

competition that currently exist.