According to the price theory, the cost is the basic component of the product value, which determines the lowest limit of the product price. If the price is lower than the cost, the enterprise will not be profitable; the market demand affects the customer's understanding of the product value, and then determines the upper limit of the product price; while the market competition condition adjusts the price to fluctuate constantly between the upper limit and the lower limit and finally determines the market price of the product.
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The price of the product can change between the upper limit and the lower limit