This blog is about Graphic Design, Vector Art, and Cartoon Illustration

January 12, 2015

What determines the price of something

The price of anything is determined by how much people are willing to pay. We all learned that in school, and yet it seems to be something that gets forgotten over time. Maybe it's because you have to stand back, and also not listen to the simplistic explanations that you hear.

When I got my degree in Graphic Design, I also minored in Advertising. And that meant taking all of the prerequisites for Marketing, such as economics. And no, I don't profess to be some big expert on how macro, and micro-economics works, but at least I have a little bit of an idea, and can reject silly things I hear, and am receptive to how all of it actually works.

Remember that the price of something isn't determined by one person, or even a small group. It takes a lot of people to determine a price. Governments have tried to fix prices, and it always fails. That's because ultimately the market shakes it out, and prices go up, or down. If you're curious, for example, why the price of gasoline is going down, you need to read business journals, not short, simplistic statements on the internet.

Probably the most common misconception is that price is fixed by a manufacturer. You may have heard that, because a manufacturer hires a celebrity for their ads, or something like that, the price goes up. The important thing to remember is that they can ask any price they want, but they will only get the price that people are willing to pay.

Personally, I have found all of this fascinating ever since I started learning the value of money, and how it works, as a kid buying candy at the drug store. I saw a lot of kids who had no idea being cheated. It took some time, and I'm still working on it, but I figured it out. Sad to say that there are a lot of bad people out there who will lie or *stretch the truth* in order to try to cheat you. But they can only try! If you understand how it works, you can just smile and say, *nice try!*

Pictured above: a One Hundred Trillion Dollar bill from Zimbabwe. Yeah, it was real, and not even worth the paper that it was printed on in 2009.

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