The fair price

The economic value,the real value and day to day value all differs ,in the modern times more mechanism is developed for determining prices , various exchanges are developed for dealing in the stocks, commodities,agro commodities etc,further a mechanism of speculation is imposed to improve liquidity and to provide exit options and to ensure the return via derivative trading.

the material is the same but the price fluctuates widely making one causality or a winner,it could be termed as disadvantages of the modern technology which increases the access and also creates weapons of mass destruction.
the price may sometime not be governed by fundamentals and in the present times the supply of money is liberally being eased by govt which is impacting price more not inthe plain way,as this excess money may not be driving demand but driving speculation,which leads volatility in prices.
the prices are impacted by the amount of control being exercised by the govt directly or by providing subsidies,sometime govt restrict movement of goods ,encourage or discourage export or import,even the availability of quality seeds ,water,power,labour etc are in the hands or impacted by them in developing countries.
the market forces are/should be basic determinant of prices ,the free play of supply and demand forces should be the good determinant of prices ,but in the modern times the concern has been raised by considering future supply/demand ,likely demand /supply scenario and event based likely impact on demand and supply.
in modern times the perception and psychology is impacting the prices more ,in the case of crisis the things which appears a hedge,a security the attention is diverted toward it. the perception of conflict or peace in producing countries impact the prices ,its more of a euphoria when the perception changes and all becomes positive and in gloom all loose shine.
the psychology is big element in price,the real estate price in particular streets /area fetches more ,the image created,the brand value impact the prices as the satisfaction is more understood by consumer or made to understand the same by marketers ,the price increases.  
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blog at WordPress.com.

Up ↑

%d bloggers like this: