Sigma: Journal of Political and International Studies


price, supply and demand, market predictions


More than any other market aspect, price has the most direct linkage to supply and demand. Suppliers make product decisions according to production costs. Consumers decide their purchases after considering prices. Most prices are not set arbitrarily. Many factors must be analyzed before proper prices are applied. For this reason, the market manager must consider pricing strategies, evaluate applicable factors, set the price, predict its effect on the market, then observe the outcomes. Sometimes the outcomes are not in accord with the predictions. Prices and their effect on market supply and demand are not absolute. There are varying aspects in the market which make predictions mere assumptions or speculations in most cases. In the case of price effects, the predictions have the least degree of certainty.