Affects managements decisions on product pricing

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Reference no: EM131214300

In the long run, a company must price its product to cover its costs and earn a reasonable profit. But to price its product appropriately, it must have a good understanding of market forces at work. In most cases, a company does not set the prices. Instead, the price is set by the competitive market (the laws of supply and demand).

Please explain what this means and how it affects management's decisions on product pricing.

Reference no: EM131214300

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