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Economic and Ethical Issues of Pricing
Finance & Accounting
Pages 4 (1004 words)
Economic factors affecting pricing Name Course Instructor Date Before pricing your products/service, it is vital to understand that prices can have double-edged impact on your products in the sense that it can make or break the business (Martins, 2010). For this reason, every businessperson must devise his or her prices with caution in order to gain effectively from moving sales but at the same time avoid negativities associated with bad pricing.
Using prices may be because every company wants to gain and retain competitive edge at a price level. Pricing cannot be done in isolation considering that there are number of economic issues in the business environment that firms must take into consideration before setting up prices in order to remain relevant (Devan, 2011). Key economic issues that may affect a business’s pricing strategy include but not limited to level of competition, recession, demand, cost of services, elasticity and government policy. The level of competition will definitely affect the organization’s preferred pricing strategy (Martins, 2010). The tax advisory firm is already facing competition from non-CPA market competitors and do-it-yourself tax-preparation software packages. Provided you are not a market a leader in the industry, competitive pricing will always have a great impact on your service prices. This is because market leaders are renowned for establishing standard prices against which comparisons will be made on other services price offering. ...
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