What is Shadow Pricing? (How it Works?)

In this video tutorial, we discuss what is Shadow Pricing, how it works, its need along with its advantages and disadvantages.

What is Shadow Pricing?
Shadow pricing is a technique of assigning a specific price to an item commodity or service that is not bought or sold in any marketplace. Instead, the prices are set based on subjective assumptions.

Needs for shadow pricing?
- Required for calculating the opportunity cost
- Helps in making certain decisions
- Estimate the costs and benefits of society.

Advantages of shadow pricing
- Helps in making proactive decisions
- Consider the economic opportunity cost
- Helps in comparison
- It prevents underpricing
- Suitable for monetary calculations

Disadvantages of shadow pricing
- Pricing is entirely based on subjective assumptions.
- It doesn't have any proof.
- May lead to a wrong decision.
- High chance of inaccurate estimates.
- Suitable for deciding on the short run.

For more details, you can refer to our article –

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[oluwatomisinhephzibah]

This is a great explanation. If my lecturer could explain like this, I would love economics more.

[fullofpositivity]

PLEASE, provide a video for cost benefit analysis as well

[arshadlmam]

Ausome sir fantastic easy understandable approach thanks a lot for wonderful videos keep going😊😇🙏🙏

[RTknowledge-gl]

Very helpful and informative videos thanku sir 🙏

[artirathod]

Pls make video on how to price / valuation of start-up

[nikshithasunilbhandary]

Can you please help us to understand dual problem

[neefee]

Great video however it should be noted that economics as a science has been shunned by the majority of scientific community when it comes to the field's climate change calculations; there is a very interesting debate in the scientific community on economics failed methodology for calculating climate change impact and costs on Professor Steve Keen's YT video. Highly recommend it has changed my mind on climate change & impacts after previously confining myself to an econ literature bubble Watch Steve Keen (an enlightened econ) & change my mind.