Posted in Finance, Accounting and Economics Terms, Total Reads: 450
Definition: Choke Price
The lowest price at which the demand for a good is zero. The price is at such a level that makes the product undesirable as consumers believe that the price is too high and consumers stop buying it. Choke price is generally associated with natural resources.
Choke price can be seen with the demand curve. For example, consumers might buy 1000 units of of a good at Rs. 2000, 500 units of the good at Rs. 3000, 100 units of the good at Rs. 4000 but no units at Rs. 5000 as they think that the price is too high for the good.