Title: The Value Approach to Pricing: Demand Influence
Abstract: In this chapter we reverse direction, turning away from cost-influenced supply to value-influenced demand. The market, which reflects consumer preferences, gauges demand. Demand for energy is both direct and derived. Natural gas, for example, is desired for its heating ability alone, a direct demand, and also for its use as a fuel in industrial processing, an indirect demand depending upon the market for the product being processed. Important to the forecasting of energy demand is price elasticity, the responsiveness of the market to changes in price. Ignoring the impact of price changes can have a disastrous affect upon the quantities of energy required. Price differences between products having the same or similar costs can encourage price differentiation, a permissible result, or monopoly pricing, prohibited under the anti-trust statues. The theory of class price establishes reasonable distinctions.
Publication Year: 2010
Publication Date: 2010-11-10
Language: en
Type: book-chapter
Indexed In: ['crossref']
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