Price is one of the most familiar and frequently used words for a person. Every day people buy food, clothes and make larger purchases, while largely guided by the price of the thing. If in everyday life the price is associated only with a price tag, then in economics this concept depends on many factors, there are whole theories regarding pricing.
At first glance, price is a very simple and obvious concept. By purchasing a product, the buyer pays a certain amount of money for it, namely, a certain amount by the seller. Thus, a transaction takes place based on the willingness of the seller to transfer the goods, and the buyer to buy for a specified amount of money, i.e. exchange ratio. The value of the ratio of goods and payment determines the value of the goods. Price, on the other hand, is a monetary expression of the value per unit of goods.
Price is one of the fundamental economic concepts. Various economic schools (A. Smith, K. Marx) approached the definition of the concept of price in different ways. So, Smith's price, on the one hand, depends on labor input, and on the other, on the state of supply and demand. Marx, on the other hand, put forward the theory of surplus value - the difference between the created value and the value of the labor force used; this is profit. According to Marx, surplus value is created precisely in the sphere of production, regardless of supply and demand. Others make the price dependent on the subjective usefulness of a product or service for a particular person.
Associated with this are approaches to pricing. The cost approach gets its price by adding costs and benefits. The value-based approach is demand-driven. Within its framework, the price is often set in the bargaining process as the identification of the subjective value of the goods for buyers. The passive pricing method consists of targeting competitors' prices and setting similar ones. It is customary to single out several pricing factors, including: the cost of creating a product, its value, the presence of competitors, the state of demand, the influence of the state institution on pricing.
There are different types of prices: retail, wholesale, purchase, market, etc. The retail price is set for items sold individually for personal use. Wholesale prices apply to goods sold in large quantities (for mass use in the enterprise or for resale) - these prices are usually lower than retail prices. Purchase (wholesale) prices are set by the state in the domestic market for agricultural products. The market price is formed in the market in accordance with the present supply and demand for the product.
