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Mean Price Definition
When it comes to problems related to prices, profits, losses, cost price or selling price, etc the term ‘mean price’ plays a very important role.
Mean price is also called average price as is defined as the average of all the given prices of the known items. In simple words, the average of a set of prices given to us is called the mean price of that set or group of items.
If one wants to find the mean price of a group of items he/she can add up all the given prices and then divide their sum (addition) with the number of prices that were present. It is the sum of prices divided by the count of prices.
The concept of average is very simple and easy. If we buy 5 items at Rs.10, Rs.20, Rs.30, Rs.40 and Rs.50 respectively then the average price is Rs.30. (their addition divided by the number of prices)
In other words, the mean price is nothing but the sum divided by the number of elements. However, the concept of mean price in the stock market is a little different.
What Is Price?
Price is defined as the equivalent of money placed on some goods or items. It is usually expressed with a known term as currency.
Every marketing exchange involves price. In easy words ‘Price’ is the actual cost and the method to higher the worth of the product to the customers.
The barter system is one of the oldest pricing systems where ‘A’ would give some valuable, good or an item to ‘B’ in exchange for some valuable, good or an item.
Price is directly involved in the success or downfall of a marketing company. It aids to maintain the ‘aura of competition’, ‘image’ and ‘gains’ of a business in the market.
What Is Mean?
The term ‘mean’ in mathematics, is an average of one or more than one set of two or more numbers. The two commonly known types of mean that can be calculated are geometric and arithmetic.
In easy words ‘mean’ gives us the average value of a set or the most frequently occurring (most common) value in a given group or collection of numbers.
To find the mean of a given group of numbers or items or elements, you must add them up and divide their sum with the number of given terms.
Examples To Find Mean Of Given Numbers-
Example- 2, 4, 8, 10, 16, 20, 28.
Mean = 2 + 4 + 8 + 10 + 16 + 20 + 28 + 8.
= 96/8
= 12.
Example- 12, 14, 18, 10
Mean = 12 + 14 + 18 + 10
= 54/4
= 13.5
Example- 20, 40, 80, 100, 160, 200, 280.
Mean = 20 + 40 + 80 + 100 + 160 + 200 + 280
= 880/7
= 125.7
Example- 1, 4, 8, 9, 3
Mean = 1 + 4 + 8 + 9 + 3
= 25/5
= 5.
Example- a, b, c, d, e
Mean = a + b + c + d + e
= a + b + c + d + e /5
= a + b + c + d + e /5.
Mean Price in Stock Market
The concept of the average price in the stock market is from buyers and sellers as well.
The mean price of a stock in the stock market is calculated by dividing the amount invested by the number of shares purchased by an individual.
Examples of Mean Price-
-
The price of a cricket bat on Monday is Rs.200, on Tuesday it rises to Rs.400 and on Saturday it changes to Rs.600. The mean price of the cricket bat is-
= 200 + 400 + 600/3
= 1200/3
= 400.
The mean price of the cricket bat is Rs.400
-
The price of a Bag fluctuates over the week respectively. The fluctuation in the prices are – Rs.100, 200, 300, 400, 500. Then the mean price of the bag is:
= 100 + 200 + 300 + 400 + 500/5
= 1500/5
= 300.
The mean price of the bag is Rs.300.
-
The price of a clothes in a shop range from Rs500 to RS. 5000. The mean price of a clothing item in the shop is:
= 500 + 1000 + 1500 + 2000 + 2500 + 3000 + 3500 + 4000 + 4500 + 5000/10
= 27,500/10
= 2750.
The mean price of the bag is Rs.2750.
Conclusion
The mean value plays an important role in the field of the stock market, mathematics and the business world. This term has helped the ‘average based’ calculations simple and easier. In addition to this, the mean price formula will make it easy to solve the problems easily.
