Final answer:
It is false to say setting prices for organizational buyers is very similar to setting prices for consumers, as organizational pricing can involve negotiations and other factors that affect pricing decisions, unlike the more fixed consumer pricing. Additionally, consumers may pay more than the equilibrium price due to product differentiation or necessity.
Step-by-step explanation:
The statement that setting prices for organizational buyers is very similar to setting prices for consumers is false. While the basic principle that the cost of production and the desired profit determine the price of a product applies to both, there are differences in how prices are set for each group.
For organizational buyers, the pricing may involve bulk discounts, customized pricing agreements, and negotiations that are not usually present in consumer pricing. Additionally, organizational buyers often consider factors like supplier reliability, the total cost of ownership, and possible long-term partnerships, which can influence the price they are willing to pay.
On the consumer side, pricing is often more fixed and based on factors such as brand value, competition, and standard retail markups. The price system in consumer markets is influenced by the principles of supply and demand. Prices are deemed neutral and flexible, adjusting to market conditions over time and understood by individuals who participate in the market.
In the goods market, the statement that no buyer would be willing to pay more than the equilibrium price is false. Buyers might pay more due to factors such as product differentiation, perceived value, scarcity, or immediate necessity. The equilibrium price is a theoretical construct where the quantity supplied equals the quantity demanded, but market conditions can lead to deviations from this price.