Mr Vinod published a book for MBA aspirants on Management. He wants to fix its price. Which of the following factors would he ignore in deciding the price of his book?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Public regulations
Option (1) Public regulations — Not named as a factor (Correct). The factors that affect the fixing of a price are product cost, utility and demand, extent of competition, government and legal regulations, pricing objectives, and marketing methods used. None of them is named “public regulations”, so as per NTA this is the one Vinod would ignore.
Option (2) Pricing objectives — A factor affecting price (Incorrect). Vinod may want the highest profit, a larger market share or to face competition. His aim decides how high or low he prices the book.
Option (3) Product cost — A factor affecting price (Incorrect). The price must cover the cost of producing and distributing the book, so cost sets the lower limit.
Option (4) Extent of competition in the market — A factor affecting price (Incorrect). The prices of other management books for MBA aspirants limit how high he can go.
Note: As per NCERT, Option (1) is also a factor affecting price. “Public regulations” is NCERT’s factor Government and Legal Regulations under another name. NCERT says the government can intervene and regulate the price of commodities “to protect the interest of public” against unfair pricing. So, going by NCERT, this factor cannot be ignored either. The given answer is as per the official NTA Answer Key.
NCERT (2026-27 Edition): “Factors affecting Price Determination There are number of factors which affect the fixation of the price of a product. Some of the important factors in this regard are discussed as below: “3. Extent of Competition in the Market: Between the lower limit and the upper limit where would the price settle down? This is affected by the nature and the degree of competition. …” “4. Government and Legal Regulations: In order to protect the interest of public against unfair practices in the field of price fixing, Government can intervene and regulate the price of commodities. Government can declare a product as essential product and regulate its price. …” “5. Pricing Objectives: Pricing objectives are another important factor affecting the fixation of the price of a product or a service. …” |