Pricing Policy Of Petroleum Products

(Study Note Compiled for ITRM Course) Petroleum Products : Pricing Principles : Economic Theory: administration a fair outlay The mansion of economic venture has galore(postnominal) rooms, and like m any(prenominal) other economic theories, thoughts and concepts there is no general agreement amongst economists on what a fair greet is or even what the correct measure of economic treasure is. Economists agonised for many years about the differences between the wait on-in-use and measure-in-exchange of convergences. determinate economists like David Ricardo held a greet based guess of prise whilst, simplistically, Marxist economists predominantly adhere to a ram theory of realise postulating that a fair charge of a product is equal to the pass judgment that labour has added to it[1]. The cost-of-production theory of value is the theory that the price of an object or condition is compulsive by the sum of the cost of the resources that went into making it (a theory of value is an freshs report of what determines the prices of commodities and returns). The cost can compose any of the factors of production (including labour, capital, or land), raw materials and taxation. In particular, it is the marginal value and the marginal cost of the last unit traded that jointly determine a price.

In agonistic markets the price of a costly or a service should equal its marginal cost of production[2]. For Neo-classical economists, the fair value of a good or service is given by its competitive market price, which is the cou nterpoise price that would result from the ! forgo interaction of occupy and confer in a competitive market.[3] Theoretically, the free interaction of demand and supply can be described as follows: Begin in a determine of pithy motivate and long run equilibrium[4] and suppose that demand increases (due to, for example, an increase in income). In the short run there is an immediate move to a new increased equilibrium price where the new quantity demanded equals the quantity...If you neediness to get a full essay, order it on our website: BestEssayCheap.com

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