In business pricing plays an important role. This is very necessary because price is gonna make the customers buy a product and after that the seller will earn a profit. Setting a price is a controversial topic, like people debate on how much control business owners means sellers should have. Well, the few from business sides believes that they should charge whatever they want. But general public believes that there should be some limits or restrictions, and if it's a product that is used for daily life then it becomes more necessary to maintain the price. In my opinion I believe that both both sides have valid points, and if we can maintain a balance between them then it is the key to lead a good economy system.
If you have never heard of price cap then let me explain it to you. Like many people does not know about it, so it's like setting a limit on how high a seller can charge for a product. Usually this price cap is used by the government for essential items such as medicine, grocery, house, or fuel. This price cap has only one motive and that is to protect the general public from unfair pricing. Because sometimes sellers in difficult times decided to increase the price of rice or fuel and it happens overnight, how would you feel if it happens during natural disasters? I find this very cruel and many people suffers because they can't purchase the things they need to survive. But a price cap is able to prevent these kind of extreme increases of price.
A price cap is seen as a good opportunity for the people and it helps to control exploitation. Some desperate sellers are always ready to exploit when they see the consumers in trouble. Price control is needed for fairness and in the end it is gonna prevent companies from taking advantage of vulnerable situations.
If the prices are predictable for people it becomes easier to plan their spending better. I also have seen that businesses also gets enough benefit from the stability of the prices because it keeps the demand steady. This fairness between the seller and consumer creates a trust. Without any rules and regulations the big businesses will start to dominate the market by manipulating prices and in result the smaller competitors will be out, this kind of thing will reduce competition and lead to even higher prices.
However, there's a bad side of price cap which can create problems. For example if prices are way too low, then the sellers might not be able to earn profits to survive. This can result in poor-quality products also it can cause shortage of it, or the business might close down. Like if the government sets a very low price for bread then the bakers might stop producing, the reason is the ingredients which is used to bake the breads, if the ingredients are higher than the price they’re allowed to charge for bread then this business will surely close down. In that case, consumers and sellers will be the one suffering.
So, there's a need for price cap but it's also important for sellers to have enough freedom to run their operations successfully.
The government should set a minimum and maximum limit and not make the price cap fixed at a price. This is a freedom which will keep things fair. I believe pricing should not be completely free nor completely controlled. If sellers starts to begin honest without exploiting people then there's a chance of growth for all of us. Everyone should get equal benefits and not just those who buys, but also those who sells.
Credits: Thumbnail source
Thanks for Reading!