What Is the Difference Between List Price & Net Price? |
What Is the Difference Between List Price & Net Price?
by Emma Watkins, studioD
A genuinely discounted list price is a net price. Comstock/Comstock/Getty Images
Price is a tool traders use to reach the ultimate goal of their business plan — to sell. While it may seem that the owner of the product or service controls the price, in fact the consumer also plays a role in determining the fee. Thus, price is a compromise of sorts, a sum that the buyer is willing to pay and the seller is willing to charge. List price and net price lie within this definition.
List Price Also known as the manufacturer’s suggested retail price, list price is the fee for a service or product before discounts are deducted from or sales taxes added to it. As undiscounted fees, list prices should be the highest charged and serve as the reference point used to calculate promotional prices for products and services. Net Price Net price is the final charge you pay for a product or service after discounts and sales taxes are computed. According to the “Produce Price Index Manual” co-written by the International Labour Organisation and other financial institutions, the net price, or net transaction price, can be set by a written contract that spells out the payment terms for a long-term trade agreement expected to last over one month. Spot market pricing is a similar way of setting net price, except for the fact that the contract covers one short-term transaction lasting less than one month. Price Schemes In theory, list prices are the highest charged for an item. In practice, however, some merchants inflate suggested prices. They hold their fees high, thus giving the impression that the expensive charge is the list price. A few days later, they lower the price to the real list price, giving the impression that the item is now discounted. The drop in price leads consumers to erroneously think that the product is on a special price promotion. Determining Price As mentioned, the fee your target market is willing to pay helps to determine the price of different items. The cost of creating and providing the product or service establishes the lowest amount you can charge for it without incurring a loss. Thus, consumers dictate the highest price — list price — for which an object or service can sell, while the seller calculates the lowest fee — net price — it can accept to produce a profit.
About the Author Emma Watkins writes on finance, fitness and gardening. Her articles and essays have appeared in "Writer's Digest," "The Writer," "From House to Home," "Big Apple Parent" and other online and print venues. Watkins holds a Master of Arts in psychology.
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& Copyright 2016 Hearst Newspapers, LLCWhat is the difference between electricity generation capacity and electricity generation? - FAQ - U.S. Energy Information Administration (EIA)
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What is the difference between electricity generation capacity and electricity generation?
is the maximum electric output an&electricity&generator can produce under specific conditions.
capacity is determined by the generator's manufacturer and indicates the maximum output of electricity a generator can produce without exceeding design thermal limits.
are typically determined by a performance test and indicate the maximum electricity load a generator can support at the point of interconnection with the electricity transmission and distribution system during the respective season. There are two primary factors that affect or determine the difference in capacity between summer and winter months:
The temperature of cooling water for thermal power plants or the temperature of the ambient air for combustion turbines
The water flow and reservoir storage characteristics for hydropower plants
is the amount of electricity a generator produces over a specific period of time. For example, a generator with 1 megawatt (MW) capacity that operates at that capacity consistently for one hour will produce 1 megawatthour (MWh) of electricity. If&the generator&operates at only half that capacity for one hour, it will produce 0.5 MWh of electricity. Many generators do not operate at their full capacity all the time. A generator's output may vary according to conditions at the power plant, fuel costs, and/or as instructed by the electric power grid operator.
is the amount of gross electricity generation a generator produces minus the electricity used to operate the power plant.&These electricity uses include fuel handling equipment, water pumps, combustion and cooling air fans,&pollution control equipment, and other electricity needs.
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Last updated: February 23, 2016
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