• What is the price?

    In economics there are many definitions of the concept of "price", but for ordinary people, that is, ordinary citizens, like you and me, this concept is interpreted unequivocally. We go to the store, we see the price tag, the price is written on it. So, the answer to the question of what a price is, for us, the amount of money that needs to be paid for a certain product. This is understandable to all. There is a product - there is a price, which means it can be bought for a certain amount. This is also called the value of the goods. These two concepts have differences that economists know, and even then by no means all. In simple terms, the cost is considered the price of one unit of goods. But for all ordinary people, price and value are one and the same.

    What determines the price

    Of course, first of all the price depends on the cost of production. A space rocket cannot cost just like bread. The difference in costs does not detract from the merits of bread, but it is also clear to the child that it is necessary to put more energy into making a rocket. The cost of production can include the cost of raw materials. If the bakery itself produces it (in the case of bread, this is the own grinding of grain into flour), then it takes into account the cost of flour.If flour is bought, then the cost of bread is included in the cost of bread. Also to the cost of the product are added the cost of electricity, workers' wages, equipment depreciation (to recoup the money spent on the purchase of machines and devices), the rent of land and premises. All this, spent for a month, is added up, divided by the number of loaves produced during the same period, and a commercial margin of at least 20% is added. As a result, we have the price of one loaf of bread.

    Also, the price depends on the demand for the goods. If the bread is not enough, the price of one loaf will soar at times. Even theoretically it sounds scary. Therefore, everything related to the prices of essential goods is under state control.

    But competition has a beneficial effect on price. The more firms produce the same bread, the stronger they will want to conquer the market. And the strongest weapon in the fight for the buyer is price reduction. Sometimes firms are so addicted to this process that they put the price lower, two or more times lower than the market value, this process is called dumping and is prosecuted.

    Bid price

    After we have considered what the price of the goods is, it is necessary to tell about some types of prices. Sellers especially should pay attention to what is the price of demand. After all, as often happens: demand is growing, and sellers artificially inflate prices. For example, on New Year's Day, the demand for Abkhaz tangerines increased. Sellers raised their price from 55 to 70 rubles. The price lasted a week, and sales stopped. What happened? The bid price has been exceeded. That is, buyers correlated the proposed price and the benefits from the purchase of mandarins, and switched to the tangerines of Morocco. Now it became clear what is the price of demand?

    Market price

    It's easy to understand what a market price is. This is the average price for a certain type of product on the market. There is beef for 370 rubles in the early morning and 300 in the evening. Hence, the market price of beef is 335 rubles. This determines the market price of any product. Moreover, the "market" is only a place where sellers sell goods. The market is a global space, it is influenced by many factors that also affect the price.

    Consumer price index

    This cunning concept was invented by economists in order to monitor inflation. Let us explain how the price index is formed.What is a consumer basket? This is the minimum set of products to survive. It includes food and industrial products. For example, it cost 5,000 rubles in January and 5,500 rubles in February. Its price increase, which means the consumer price index, was 10%. This means that inflation for the month is 10%. God forbid us such happiness! In 2012, inflation was only 6.5%.

    Value of division

    We studied the price of division in physics lessons in the sixth grade, remember? For those who have forgotten, I remind you what a division price is: this is the minimum amount of what we measure and see on the instrument. For example, on the thermometer, which we measure body temperature, when we are ill. The division price is 1 degree Celsius. In the oven, where the Christmas cake is baked, the price of the division is 10 degrees. On the watch, the division price is 1 minute.

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