UNDER PRICED Meaning and
Definition
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Underpriced refers to an item, asset, or good that is priced lower than its perceived or intrinsic value. It is a condition where the price of a product is considered to be too low or below its true worth in the market. This discrepancy can occur due to various factors such as market inefficiencies, misjudgment by sellers, lack of demand, or simply a desire to increase sales.
In financial markets, underpricing commonly refers to when a security or stock is issued at an offer price below its market value. This often occurs during Initial Public Offerings (IPOs) when a company's shares are priced at a level that is lower than anticipated market demand. Underpricing in this context is often done deliberately to attract more investors and create a buying frenzy, thereby effectively raising capital for the company.
Outside the financial realm, underpricing can also refer to goods and services being priced below their fair value. This may be a result of miscalculating production costs, a need to clear excess inventory, or even a strategic move to gain a competitive advantage by attracting more customers. Customers may consider an underpriced item as a bargain or as providing a better value for money. However, underpricing can also have negative consequences such as reduced profit margins for businesses or a perception that the item is of lower quality.
Common Misspellings for UNDER PRICED
- underpriced
- underprized
- ynder priced
- hnder priced
- jnder priced
- inder priced
- 8nder priced
- 7nder priced
- ubder priced
- umder priced
- ujder priced
- uhder priced
- unser priced
- unxer priced
- uncer priced
- unfer priced
- unrer priced
- uneer priced
- undwr priced
- undsr priced
Etymology of UNDER PRICED
The word "underpriced" is formed by combining the prefix "under-" with the verb "price".
The prefix "under-" in this context means "below" or "lower than", indicating that something is priced lower than its expected or perceived value.
The verb "price" comes from the Middle English word "prisen", which in turn derives from the Old French word "prisier", meaning "to value" or "to appraise". Ultimately, "prisier" can be traced back to the Latin word "pretiare", meaning "to value" or "to estimate".
Therefore, the word "underpriced" refers to a situation where something has been assigned a price that is lower than its actual worth or value.
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