... setting behaviour. The price a business sets also depends on the demand and cost factors of the firm according to Table D of the Bank Of England's study 'How are prices affected' the top preference (40%) of respondents said that they price their products at the highest level the market could bear, hence the highest the demand curve could handle before it changes. However demand and cost related issues may affect the price in different ways for firms in dissimilar market structures. Therefore the market structure and the firm's own objective affects the price. The traditional theory that all business seek only to maximise profit can be correct if the market structure and the firm's objective are to affect the pricing policy of the firm. The traditional theory of the firm states that under the market structure of Perfectly competitive, Monopolistic, Oligopolistic and Monopoly the price and output is set ...

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