At this college, we generally focus on being nice to others. In this class we have focused on solving the needs of the potential client. And as guest speakers have said, we tend to be content to the point of not trying to keep the price up when going into sales. But, when that happens we aren’t looking at the needs of the people not in the sales discussion: your coworkers and other clients.
As is taught in economics, the price of things trends to a specific point, the equilibrium point, because at that point the highest number of both buyers and sellers can exchange. What that means is that the sellers, those supplying the goods or services, are properly funded and are capable of helping provide to customers, while the highest possible number of customers are being served. It also, by definition, is within the price range of many if not most of the potential customers in the market.
The forces that move price to that point are buyers wanting the price to be 0 and sellers wanting the price to be infinite. When the price is too high, the sellers cave to the buyers and lower the price, knowing it is price multiplied by the number of sales that gives them their income. If the prices for a whole industry are too low, companies will either hurt or move to another market, lowering supply and lowering the number of customers served. And if the prices for only one business are too low, when that is not the case for its competitors, its employees will have to look for a new job due to their company being out-competed.
When anyone in the market does not act in their own interest regarding price, everyone around them suffers economically. While it is tough to always see that, it is what benefits all effected.
BoweryJE22
Interesting prompt. Personally I can relate to both sides of the spectrum (charging too much vs charging too little), and as you mentioned it is a very delicate balance between the needs of buyer and seller.
Thanks for diving into some of the economics behind pricing. The trickiest thing for me is pricing with close friends and families or pricing for things I truly enjoy doing (and would probably be willing to do for free).
That is a very interesting proposition. I can see the validity if both sides, and I agree that in certain situations it can be unethical, but it can be okay in other situations.
Good points around sellers needing to keep their prices where they will be advantageous to the whole of the economy. Sales and the attitude sellers bring to the community at large have a great impact on society as we know it and I would argue we don’t spend enough time thinking about that. Thanks for bringing this up.
Good points made in this post. It’s definitely important to be considering the science behind selling as well as the customer’s need.