Who controls the price of a product?
This competition of sellers against sellers and buyers against buyers determines the price of the product. It's called supply and demand. The price is the measure of how scarce one product is compared to all other products and all incomes.
Price controls are normally mandated by the government in the free market. They are usually implemented as a means of direct economic intervention to manage the affordability of certain goods and services, including rent, gasoline, and food.
Laws enacted by the government to regulate prices are called price controls. Price controls come in two flavors. A price ceiling keeps a price from rising above a certain level—the “ceiling”.
Governments in planned economies typically control prices on most or all goods but have not sustained high economic performance and have been almost entirely replaced by mixed economies. Price controls have also been used in modern times in less-planned economies, such as rent control.
The Securities and Exchange Commission (SEC) or the Commission is the national government regulatory agency charged with supervision over the corporate sector, the capital market participants, and the securities and investment instruments market, and the protection of the investing public.
1. Pricing reports to the CEO or general manager. In some cases, pricing answers directly to the person in charge of profit and loss for a given business unit. That might be the CEO.
The market price of an asset or service is determined by the forces of supply and demand. The price at which quantity supplied equals quantity demanded is the market price. The market price is used to calculate consumer and economic surplus.
Setting List Prices: The act of putting a list price on a product should belong to product management, or at least product marketing. These are people who should understand how the buyers perceive the value of the product.
In order to protect the interest of consumers government fixes the maximum price of the commodity. This maximum price is generally lower than the equilibrium price. This is called control price or ceiling price.
Limiting price increases
In the absence of government regulation, the monopoly could charge excessively high prices. As a surrogate for competition, the government regulator can set prices (or limit price increases) to make sure the level of profitability is not excessive.
How does the government play major role in controlling prices?
To summarize, it is responsibility of Government in any country to ensure impartial supply of essential commodities to people at reasonable prices. Government has to fix prices of commodities when there is huge production or if there is scarcity of products.
In macroeconomics, a price ceiling is an economic principle that determines the maximum price of goods or services. Governments can set the imposed price, which is typically lower than the market equilibrium price.
Governments set price ceilings when they believe the equilibrium price (market supply and demand) for an item is unfair. By law, the seller cannot charge more than the ceiling amount. Setting a maximum price that sellers can charge for something ensures that as many people as possible can still have access to it.
In response, some policymakers have proposed implementing price controls (in particular, price ceilings) to reduce the cost of inflation for consumers. Instead of sustainably lowering prices, price ceilings cause shortages, reduce product quality, and can make longer-term inflation worse.
Price ceilings and price floors are the two types of price controls. They do the opposite thing, as their names suggest. A price ceiling puts a limit on the most you have to pay or that you can charge for something—it sets a maximum cost, keeping prices from rising above a certain level.
Partly as a result of that more tailored judicial process, US courts have repeatedly upheld the constitutionality of price controls.
A price control comes in two flavors: a price ceiling, where the government mandates a maximum allowable price for a good, and a price floor, in which the government sets a minimum price, below which the price is not allowed to fall.
In the United States, price fixing can be prosecuted as a criminal federal offense under Section 1 of the Sherman Antitrust Act. Criminal prosecutions must be handled by the U.S. Department of Justice, but the Federal Trade Commission also has jurisdiction for civil antitrust violations.
THE Independent Consumer and Competition Commission is mandated to control and monitor the prices of certain essential goods and services and not all goods and services in the country.
Individuals and companies that knowingly enter price-fixing agreements are routinely investigated by the FBI and other federal law enforcement agencies and can be criminally prosecuted.
Where does pricing sit in an organization?
In some companies, the pricing organization reports directly to the CEO; in others, it reports directly to sales or marketing or is embedded in the finance department.
There are several factors a business needs to consider in setting a price: Competitors – a huge impact on pricing decisions. The relative market shares (or market strength) of competitors influences whether a business can set prices independently, or whether it has to follow the lead shown by competitors.
A pricing committee is a team of people within a company that are assembled and given the authority to develop the pricing model for the firm.
The four roles that prices play is that prices convey information to consumers and producers, prices create incentives to work and produce, prices allow markets to respond to changing conditions, and last but not least, prices scarce resources efficiently.
(i) The prevention of exploitation of consumers by producers. (ii) And the avoidance or control of inflation.