Price is one of the elements of the management of market economic mechanisms and reflects the laws of economic development and conjuncture of the commodity market. At the same time, the price is the most critical indicator for each specific enterprise, predetermining the size of its income and profit. Price bears the property of competitiveness, acting as an instrument of competitive struggle, the redistribution of resources, and the redistribution of capital.
Price flexibility is necessary for the present economy because it enables entrepreneurs to generate income and quality consumer products. On the part of the producer, flexible prices help to increase the number of orders due to building a dialogue with customers and discussing details about it (Laverty & Little, 2020). In addition, it avoids waste and increased costs because stale goods can be sold on sale or with the help of bulk. Finally, flexible pricing suits different consumers depending on born demand and offers. Each customer will be able to find a product at an affordable price and thereby stimulate the other economy.
The government plays a vital role in pricing because it determines the general rules of price formation. The fixing and regulation of prices are set only for a limited range of products that may be important to ensure and maintain the population’s standard of living. Businesses use tariffs to set prices for goods they sell established by them independently or on a contractual basis, and only in some cases stipulated by legislative acts, at state prices. I believe that government regulation of prices is necessary for health care providers. The issues of insurance and free care are very subtle, and in a market environment, the price changes dynamically, but only with the help of the state. Nevertheless, in matters of prices for environmentally harmful goods (including gasoline), the role of government may be absurd and unnecessary.
Reference
Laverty, M., & Little, C. (2020). Entrepreneurship. OpenStax.