Negative Costs

According to “The Action of Smoking and Health,” every six seconds someone loses their life as a result of a tobacco related disease. It’s hard to realize how damaging cigarette smoking’s effect can be until you experience it first hand. It is almost certain that every one knows someone who is currently a smoker or was a smoker at some point in their life. For years smoking was the seen as the “cool” thing to do, it was how to “fit in.” There was no real emphasis placed on the dangers of this particular habit, and as a result, it became a world wide trend. In the past, technology and medicine were not nearly advanced enough to be able to determine just how harmful tobacco usage is. However, as we have made medical and

Thirdly, option is to strategically adjust the prices of their products because consumers are often very price sensitive. By doing so the company can either create more value that defines the quality and quantity of the product.

Reason: Meeting buyers needs will increase demand. Higher demand=potential increase in profit and market share.

The pricing strategy that I chose is marketing objectives. Our company will deliver on this strategy to this stand by competing with our competitor’s stand. Our competitor, Jimmy, manages the Lemonade Stand “Liquid Yellow” charges $1.50 for one cup of lemonade. However, they use artificial ingredients, such as artificial flavoring and coloring, white sugar, etc. My company decided that we want to have a price that is higher than Jim’s price. We decided that we want to charge $2.00 for a cup of lemonade. We decided to charge this price because unlike Jim’s stand, we use all natural ingredients, which cost more than artificial ingredients and are healthier for you than artificial ingredients are. That is my company’s pricing strategy.

Furthermore, the contractor's insurance protects you if one of his employees is injured on the job, his work fails prematurely or if his actions result in an injury to someone who is not his employee.

If market demand increases, price is bid up and economic profits are made in the short run. These economic profits attract new firms to the market, and existing firms may expand. But to produce their output, firms need resources. If the total demand for resources increases significantly, resource prices are bid up for each firm in the industry. This causes an upward shift of the average total cost curve, consistent with a higher equilibrium price at the point of zero profit.

Cost benefiting is a positive financial investment overall. Economically there will be less time and more productive work with less errors and stress put on clinical staff resulting in time off and time lost. Clinical documentation systems save in staffing costs bring down overall overhead costs. There seems to be a huge cost associated with medication expenditures and without missed documentation or wasted, missing, over medicating or duplication the electronic system would generate huge cost saving in this area. Another area of cost cutting would be decreased billing

E., & Gould, J. P., 1966). Furthermore, the members are price takers and do not have the power to influence price changes. We now understand that perfectly competitive markets are very rare and that in reality our product exists in a different type of market. The four types of markets are: Monopoly, Oligopoly, Monopolistic competition, and perfect competition. Our company has gained enough power in the market to influence price and allow it to choose its own optimal price. This means that establishing an equilibrium where QD = QS does not necessarily apply. Perhaps our company has developed an innovation that makes the quality of our microwave meal much better than our competitors or we have developed a process than drastically lowers the cost of processing the ingredients for our product. Regardless of the reason, our company now has a competitive advantage and we must take advantage of it in order to become dominant in our industry.

This is because the risk of a building contractor being responsible for someone being injured is greater, and when this happens, damages are typically more. As an example, medical costs for an injury might be $200,000 to $300,000, and legal fees could total more than $100,000. If your coverage is for only $300,000, you might owe from $50,000 to $100,000 out-of pocket.

Many firms may have to seek profit maximization through trial and error. e.g. if they see increasing price leads to a smaller % fall in demand they will try increase price as much as they can before demand becomes elastic.

One business decided to let their competition set their prices. And it had the potential of driving the company into bankruptcy.

After doing some research, what is the Pricing Paradox? How is this best managed by new entrepreneurs as they make their pricing decisions?

pricing closely, as being out of step with the market can cause dramatic market share changes in a

have more “pricing power” than when demand is much weaker and falling (e.g. during a recession).

Quite often, consumers purchase goods and services based on their perceived need. Upon making the decision that a need is present and a solution is available consumers are more equipped to react to that need. Although previously perceived that consumers will normally accept prices as presented by suppliers that remains to not be the case. Consumers assess and process prices based on past purchases and other psychological process they went through previously such as persuasive marketing strategies, accessibility of the goods or services and possibly information gathered from prior purchasers of a product. There are countless options that are available to consumers. Consumers are then faced with the choice of choosing the product that best fulfills their need at that given point. Consumers who are knowledgeable regarding prices will be aware of the approximated price for products (Zhao, Zhao & Deng, 2015).