MANAGEMENT

Detailed explanation-1: -Solution. Product cost sets the lower limits of the price, the utility provided by the product and the intensity of demand of the buyers sets the upper limit. So, in case of inelastic demand, total revenue rises when price increases.

Detailed explanation-2: -(ii) The Utility and Demand The utility provided by the product and the intensity of demand of the buyer sets the upper limit of price, which a buyer would be prepared to pay.

Detailed explanation-3: -What is a ‘limit up’ and ‘limit down’? ‘Limit up’ occurs when the price of an asset appreciates to the upper limit set by an exchange, ‘Limit down’ occurs when the price reaches the lower limit. It’s not possible to sell a security below the ‘down limit’ price, though you may buy at the limit.

Detailed explanation-4: -(i) Product Cost The cost sets the minimum level or the floor price at which the product may be sold. There are broadly three types of cost—fixed costs, variable costs and semi variable cost. Total cost is the sum of all these three.

Detailed explanation-5: -Customer value is best defined as how much a product or service is worth to a customer. It’s a measure of all the costs and benefits associated with a product or service. Examples include price, quality, and what the product or service can do for that particular person.