Price theory explains why consumers buy goods or services from a particular company based on the agreed price and intrinsic value. External factors such as competition, demand, and market size also affect price. A supply and demand graph shows the equilibrium point where companies and consumers agree on the price. Companies are willing to increase […]
Growth at a reasonable price (GARP) combines value and growth investing to identify investment opportunities with a narrow criteria, aiming for significant returns with reasonably low risk. The strategy involves identifying firms with slightly higher growth patterns than general reference levels and qualifying them based on current valuations. The approach can be used for short-term […]
An ask price is the price at which investors are willing to sell an asset, while a bid price is the price at which they are willing to buy. The difference between the two is the spread, which represents the fees earned by market specialists. In OTC markets, bid and ask prices are displayed electronically, […]
Transfer pricing is the price a company pays to buy products and services from itself, which can cause concern for tax agencies. Companies use transfer pricing to track profit and loss, but if the price is too high or low, it can raise questions. Tax authorities are interested in transfer pricing for international transactions to […]
The Home Price Index (HPI) in the US measures changes in single-family home prices and is based on data from major lenders. It can indicate if mortgage prices are rising or falling, show loan default levels, and overall affordability. The HPI is best used with other economic factors to understand the housing market. It is […]
Competitive pricing involves setting prices based on those of competitors. Business owners must decide whether to charge more, less, or the same amount as competitors. Undercutting competitors can lead to a price war and is closely monitored by governments to prevent anti-competitive practices. Competitive pricing is the process of setting prices for goods and services […]
Price channels help identify price trends and adjust strategies accordingly. Two lines represent the channel, with the bottom indicating declines and the top indicating increases. The direction depends on supply and demand, and investors can use it to buy and sell securities. A price channel is a type of charting activity that helps identify the […]
Price discrimination monopoly is when a company charges different rates to different customers for the same product or service. This is possible due to the company’s monopoly power, which allows it to control the market and maximize profits. The company assesses different consumer categories to develop a price discrimination regime. An example is a designer […]
The “precio en dólares” is the price of a bond expressed as a percentage of its nominal value. A bond is a certificate that denotes money lent to a company, municipality, or government. The nominal value remains the same, while the price in dollars may fluctuate. The phrase «precio en dólares» is exclusive to the […]
Price skimming is a strategy where goods have high starting prices that fall over time, used to induce consumer sales. Benefits include high profits, exclusivity, and market control. It can be used for new or differentiated products, compensating for high manufacturing costs, and creating a perception of value. It can also be used to control […]
