Posted in Marketing and Strategy Terms, Total Reads: 350
Definition: Market Price
Market Price is the price at which the current product is being bought & sold in the market. The correct price of the product comes from the demand & supply chain constraints. The Market price can refer to both, the price of the company stock & price of the product.
The market price is given by the intersection of the demand & supply of the product. Any change in any of the dimension affects the price of the product. For example, if the demand is kept constant, decrease in the supply will result in increased current market price and vice versa. The market price is very important for the firms as this is the price which consumers are going to give for the offered product or services.
The demand & Supply can be depicted through the following graph.