PRICING DECISSION

price is the most important thing which generate revenue to the company and organization. It is the cardinal value that should be paid by a consumer in the market  to avail a product or service .it is one of the key element that can be quickly change to attain market change.

There are two types of decision basically made on pricing

1.     Consumer surplus

2.     Producer surplus

Consumer surplus

It is the difference between what consumer are willing and able to pay for a particular good, service relating to the market price .

Consumer surplus = willing ness to pay – actual price

Producer surplus

Producer surplus is the measure of difference between producer are willing and able to supply good ,service and the price they actually receive .

Producer surplus= willingness to pay- amount buyer actually pays