CONTEMPORARY RELATIONSHIPS BETWEEN MARKETS, PRICES AND COSTS

Abstract

:   The modern market is a complex system in which various factors such as price, supply, demand and production costs meet and intertwine. Understanding the relationship between these elements is the most important for business efficiency, competitiveness and profitability of the company. The price, as the basic regulatory mechanism in the market, is a monetary expression of the value of goods or services, and its formation is directly related to production costs and market movements. The work is based on modern research and theoretical approaches from the field of economics and management. The subject of research in this paper is the analysis of modern relations between the market, prices and costs, with special emphasis on the influence of market conditions on the formation of prices and cost management in the modern business environment. The objectives of the research are focused on: Examining how prices are determined on the modern market depending on production costs; Analysis of cost accounting methods that companies use to form competitive prices; Understanding the impact of market changes and competition on price and cost adjustments; Identification of modern approaches that enable effective management of prices and costs. The research methodology is based on a combination of qualitative and quantitative approaches: Analysis of professional literature and current research in the field of economics, management and marketing; Use of primary data through case studies of successful companies that apply modern cost accounting methods; Secondary analysis of data from relevant market and financial reports; Comparative analysis of traditional and modern cost accounting systems in the context of their effectiveness and impact on price. The results of the research show that effective management of costs and their precise allocation allows companies to define competitive prices that correspond to market requirements and consumer expectations. Modern calculation systems, such as Activity-Based Costing, significantly improve the accuracy in determining costs and thus directly affect the formation of more realistic and sustainable prices for products and services. Also, in conditions of high market dynamism, flexibility in adjusting prices in relation to costs proves to be crucial for preserving profitability and market position. These studies confirm the importance of an integrated approach to the market, prices and costs as a necessary condition for successful management in the modern business environment.