Concept in Definition ABC

The price is the value in currency that will be assigned to a good or service as appropriate. Meanwhile, when setting a price, in addition to the value of the good or service itself, they will also be decisive for its definition issues such as the effort, attention and time that have been allocated to that good or service for its achievement or production.

Sometimes, it may also be that that price today is one, but other contingencies such as the passage of time, use or the impossibility of obtaining it because is lacking, they will make that value that is granted higher or lower, even though we have been used to paying it almost always in a value almost permanent.

While the way traditional that prevails today to acquire a good or service implies the previous payment of a sum of money as we said more above, at other times in history and if investigated for sure that today they can also be found although in less measure, the barter was the method most used when having to buy a product

. That is, for example, Juan sold a spice to Pedro and in return he did not give Juan x amount of money, but he paid it with a cloth that Juan needed.

In a free market scenario, the price will be set from the law of the offer and the demand, will then be the request of that good on the part of consumers and the quantity of which the producers offer, which will determine the price in question.

In the case of a monopoly, the curve that indicates the company's profit maximization based on production costs will ultimately determine the price of goods and services.

As a consequence of time on the one hand and the ups and downs or cycles that may present or affect a economy, prices can grow (inflation) or decrease (deflation), while these variations will be appreciable for consumers thanks to the measurement of the price index carried out by some consulting firms or groups aimed at defending the rights of consumers.

Topics in Price