Archives: Terms

Definition of Price Reform Price reform refers to the process of adjusting the pricing mechanisms within a market or economy, often as part of broader economic reforms. This adjustment can involve freeing prices from government controls, eliminating subsidies, adjusting price controls, or implementing policies to correct price distortions. The ultimate […]

Definition of Price Mechanism The price mechanism refers to the way in which the prices of goods or services affect the supply and demand of those goods and services, primarily through the signals that prices send to consumers and producers. Essentially, it is the process by which market prices adjust […]

Definition of Price Leader Price leadership occurs when a leading firm in a market sets the price of goods or services, and other firms in the market follow suit by adopting the same or similar pricing strategy. The price leader typically has a dominant position in the market, often due […]

Definition of Price Index A price index is a statistical measure that examines the average change in prices of a selected basket of goods and services over time. Essentially, it is used to track inflation or deflation within an economy. Price indices are crucial for economists and policymakers as they […]

Definition of Price Elasticity Price elasticity refers to the degree to which the quantity demanded or supplied of a good or service changes in response to a change in its price. It quantifies the sensitivity of consumers or producers to price changes. More specifically, price elasticity of demand measures the […]

Definition of Price Effect The price effect refers to the change in the quantity demanded of a good or service resulting from a change in its price. It encompasses two essential components: the substitution effect and the income effect. The substitution effect occurs when a change in the price of […]

Definition of Price Control Price control refers to government-imposed limits on the prices that can be charged for goods and services in a market. These controls are typically classified into two main types: price ceilings and price floors. A price ceiling sets a maximum price, aimed at keeping essential goods […]

Definition of Price Price is the monetary value assigned to a product or service, which is determined by various factors including supply and demand, production costs, competition, and perceived value. It acts as a signal in the market that communicates how much a buyer is willing to pay for a […]

Definition of Pressure Group A pressure group, also known as an interest group or lobbying group, is an organized group of individuals or organizations that seek to influence public policy, government decisions, or public opinion without seeking to gain political power themselves directly. These groups operate within the democratic framework, […]

Definition of Present Discounted Value Present Discounted Value (PDV) is a financial concept that determines the value of a future amount of money or stream of cash flows, discounted to reflect its value in today’s terms. PDV is based on the principle that a dollar today is worth more than […]