Short Answer Type‘Efficient functioning of stock exchange creates a conducive climate for active and growing primary market for new issues as well as for an active and healthy secondary market.’ In the light of this statement state any three functions of a stock exchange.
State any four factors which affects the requirements of working capital of a company.
Long Answer TypeYour Company has set up a food processing unit in Kashmir with a production capacity of 10,000 litres of apple juice per day. The company plans to market the apple juice in tetra pack of 100 millilitres. Design a label for the same.
Distinguish between money market and capital market on the basis of:
(a) Participants
(b) Instruments
(c) Safety and
(d) Expected return
What do you mean by the price? Explain factors affecting price determination.
Or
There are number of factors which affect the fixation of the price of a product. Explain any four such factors.
Price: It is the worth of a product or service in monetary terms. This money represents the sum of values that consumers exchange for the benefits of having or using the product of service.
Factors Affecting Price Determination:
There are number of factors which affect the fixation of the price of a product and they are:
1. Product Cost: One of the most important factors affecting the price of a product or service is its cost. This includes the cost of producing, distributing and selling the product. The cost sets the minimum rate at which the product may be sold. There are broadly three types of costs: viz., Fixed Costs, Variable Costs and Semi-Variable Costs. A product’s price must at least cover the variable cost to get a marginal profit.
2. The Utility and Demand: While fixing price, the utility and demand for the product must be taken into consideration. While the product costs set the minimum limit of the price, demand of the buyer sets the upper limit of price.
3. Extent of Competition in the Market: The pricing of a product also depends upon the competition for the product. If the product has close substitutes, it cannot fix high price as customers will leave the product and buy its substitute.
4. Government and Legal Regulations: In order to protect the interest of public against unfair practices in the field of price fixing, Government can intervene and regulate the price of commodities. Government can declare a product as essential product and regulate its price. They can also fix price limits within which only one can charge for a product.
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