There are rather a few factors to take into consideration when setting a price. One thing that is a given, a firm has to make a profit to stay in business. I would also like to note that life cycle of a product will also play a role in price. Since, when a product is introduced for the most part the price is either low or high. Again, at later stages price would be adjusted. However, one of the key components of price is the demand for the product. Describe the demand curve and its role in pricing decisions.