BANKING AFFAIRS

Detailed explanation-1: -MEP involves “fixing a floor price” below which an exporter shall not sell the product to an overseas customer. Usually imposed on commodities such as “onion and basmati rice”, it hopes to restrict export volumes, curtail domestic prices and enhanc forex earnings.

Detailed explanation-2: -From time to time, the government stipulates a minimum price below which an exporter shall not sell the product to an overseas customer. The export invoice has to be at or above the specified MEP. The intention is to ensure that Indian goods are not ‘thrown away’ at low prices in the international market.

Detailed explanation-3: -Minimum Export Price (MEP) is the price below which an exporter is not allowed to export the commodity from India. MEP is imposed in view of the rising domestic retail / wholesale price or production disruptions in the country. MEP is a kind of quantitative restriction to trade.

Detailed explanation-4: -Objectives of the firm Internationally, pricing must consider costs, nature of markets and at the same time, it must be consistent with the firm’s world wide objectives such as profit maximization, market share, etc.

Detailed explanation-5: -Costs, Demand and Competition are the three important factors that determine price. The price for export should be as realistic as possible. The exporter has to exclude cost for domestic production which are not applicable for export and add those elements of costs which are relevant to export product.