How exactly does pricing work? Let's say I'm a baker and I want to sell my bread. At what price do I sell my bread?

If it's actually making a product I'd base it on that the time it makes to produce is enough to x2 whatever the living wage is in your country and if demand is high steadily increase the price.

The price shares information to the buyer, in short, the price should reflect the true perceived value of what the product is actually worth and for the time invested to create it along with some extra on the top for you to live ok being a bakefag.

>How exactly does pricing work?
The biggest companies themselves have not fully figured this one out yet. Everyone has seen the famous supply-demand curve, but in real life it's not so linear.
But let's assume it is. Ideally, you'd sell multiple products, because if you only sell one item then you need to pick one point and basically draw a rectangle from the origin to that point on the supply-demand curve (which is ideally a line). To maximize that area, it will be in the middle. But if you an expensive, low-demand item and a cheap, high-demand item that you can put in your inventory, then all of a sudden you get to fill in the curve with three rectangles. You're selling to everyone what they're willing to pay, and making more money in the process. This is the logic behind Aldi and off-brand/store-brand items. The same company sometimes even makes the stuff; they just switch labels for a few more production runs. Did I explain that not too terribly?

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Supply and demand. Is there a demand for bread? Most likely, as it is a pretty common food item. Supply is also high, though, with competitors able to sell at very low prices, due to being massive industrial conglomerates.

As a result, though demand is high, supply is also high, with, given how much food we throw away, supply being even higher than demand. As a result, bread is cheap, at maybe $3.50 for a good loaf.

If demand skyrocketed, while supply did not, then there would be not enough bread, so prices would increase. Likewise, if demand stayed the same, but supply also plummetted, prices would again increase.

The trick then, is to find a product you think will be in high demand, but a low supply, as then you can dominate more of the market, and sell for more. I recommend becoming a furry, or some other niche porn, hentai artist. Even though, on a wide scale, such sexual interests are low, the demand is still much much larger than the supply.

The first step is market research. Get the statistics. How many people live in the area? What are there incomes? What do their commutes look like?
The more info you can put into your calculation, the better. In fact, for franchised restaurants like McDonald's, this research process is complex and secret; it's very valuable. Knowledge is power.

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How the fuck do small/family businesses stay in operation when there's so much shit you need to know?

How exactly does coffee work? Let's say I'm a person and I want to drink coffee. Is coffee good for you?

Because it's intuitive. All this economics is theory, written to explain and predict the basic instincts of human trade. Humans have always figured out prices and negotiated with each other. Much of it comes with practice.

Unless you are at a corporate level, most of these things are just for pricing optimization.
Certain industries have certain profit margins they typically aim for and work backwards from there by factoring in costs and how to hit their profit goals.

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Figure out how much your inputs are going to cost and figure out how much product that will make you. Then determine other costs of business (rent, paying people, etc) and how much profit you want to make. Then BAM, you have your baseline price. Now figure out how much you can raise the price based on other factors unique to your line of work + operational area. If your baseline is too high then you have to figure out ways to cut costs to make up that difference.
Gotta be shrewd to make it in business. There's fun to be had starting a family business, but you have to know how to make it profitable so it can last to your kids.

Price of bread - ( expenses + taxes ) = 0