What is price mix? Explain the factors which are kept in mind while fixing the price of a product.

Explanation

Price mix refers to all the decisions related to price of a product.
Price determination depends upon number of factors.These are:
`a)`Pricing objectives: A firm with profit maximisation objective prefers high price and firm with sales maximisation prefers to fix the low price of the product.
`b)`Product cost:The price of the product must cover the fixed as well as variable cost of the product.
`c)`Competition: When firms have to face high competition then generally low price is fixed.In case of less competition price can be high.
`d)`Demand: The products with elastic demand are priced low and products with inelastic demand are priced high.
`e)`Government and legal regulations.