PRICING: in theory and practice

If you ask a student of economics what price is, he will answer that it is the factor which equates supply with demand. He is likely to add that, in a competitive market, price will tend to settle at a level at which no excess profits are made by the producers and the distributors, while a monopoly will fix prices so that its profits should be at a maximum. It is generally agreed, I think, that whether or not these statements contain an element of truth, they are of no use whatever to the businessman.