Question

Market economies measure business success or failure via profits or losses. Describe how prices for goods and services provide useful success/failure information for business managers.

Answer 1

Yes any business is succesfull Or not it depends on their profitability in long term as well as short term. If any company is successful it mean that it's is more competitive as well as efficient in productions of good and servicen. I. e achieving economy of scale.if any company become monopoly by using unique technology compare to other company than it's profitability also higher than other.

Prices are decider of market success of company, firm and also decide purchasing power of consumers. Prices are different type like monopoly pricing ,oligopoly price, monopolistic price, perfectly competitive pricing. These all gives each and every type information of any market and failure /success of firms working in this environment.

Monopoly pricing and perfect competitive:a seller with greater market power;who can drive up price by reducing bor increase price by reduce or increase quantity he is selling,while perfectly competition market is , under which sellers simply take the market price as given.

If market is monoply than it's is bad fir other seller or producer or company as a single firm, company is prices decider and taking maximum advantage of market price. While competitive price is good for everyone like producer ,consumer etc.

Predatory pricing:  prices its goods or services at rock-bottom levels, so that no competitiveness is left with then and than they slowly slowly increase Price after capture of market by sweeping out other competitor

In such a way success failure etc is decided by Prices.