alysis of the transactions and parties,
comparison of contractual terms (whether written, verbal, or implied from conduct of the parties), and
comparison of significant economic conditions that could affect prices, including the effects of different market levels and geographic markets.of property or servicesis best achieved where identical items are compared. However, in some cases it is possible to make reliable adjustments for differences in the particular items, such as differences in features or quality. For example, gold prices might be adjusted based on the weight of the actual gold (one ounce of 10 carat gold would be half the price of one ounce of 20 carat gold). And risksand sellers may perform different functions related to the exchange and undertake different risks. For example, a seller of a machine may or may not provide a warranty. The price a buyer would pay will be affected by this difference. Among the functions and risks that may impact prices are: [12]
. Product development
. Manufacturing and assembly
. Marketing and advertising
. Transportation and warehousing
. Credit risk
. Product obsolescence risk
. Market and entrepreneurial risks
. Collection risk
. Financial and currency risks
. Company-or industry-specific itemsof saleand terms of sale may have a material impact on price. For example, buyers will pay more if they can defer payment and buy in smaller quantities. Terms that may impact price include payment timing, warranty, volume discounts, duration of rights to use of the product, form of consideration, etc. [13] level, economic conditions and geography, services, or property may be provided to different levels of buyers or users: producer to wholesaler, wholesaler to wholesaler, wholesaler to retailer, or for ultimate consumption. Market conditions, And thus prices, vary greatly at these levels. In addition, prices may vary greatly between different economies or geographies. For example, a head of cauliflower at a retail market will command a vastly different price in unelectrified rural India than in Tokyo. Buyers or sellers may have different market shares that allow them to achieve volume discounts or exert sufficient pressure on the other party to lower prices. Where prices are to be compared, the putative comparables must be at the same market level, within the same or similar economic and geographic environments, and under the same or similar conditions. [14] of transactions
. Most systems provide variations of the basic rules for characteristics unique to particular types of transactions. The potentially tested transactions include:
. Sale of goods. Identical or nearly identical goods may be available. Product-related differences are often covered by patents.
. Provision of services. Identical services, other than routine services, often do not exist.
. License of intangibles. The basic nature precludes a claim that another product is identical. However, licenses may be granted to independent licensees for the same product in different markets.
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