Listen to a Business English Dialogue about Exhaust price
Larry: Hi Savannah, have you ever heard of the term “exhaust price” in business and finance?
Savannah: No, I haven’t. What does it mean?
Larry: Exhaust price refers to the lowest price at which a seller is willing to sell a product or asset, often used in negotiations or auctions.
Savannah: Ah, I see. So it’s like the minimum price a seller will accept before they stop negotiating?
Larry: Exactly. It’s the point at which the seller exhausts their willingness to continue negotiating and is ready to finalize the sale at that price. How do you think exhaust price is determined in negotiations?
Savannah: I think it depends on various factors like the seller’s cost, market conditions, and their desired profit margin.
Larry: That’s correct. Sellers may also consider factors such as competition and demand when determining their exhaust price. How do you think buyers respond to the exhaust price?
Savannah: Buyers may try to negotiate further or accept the exhaust price if they believe it’s fair and within their budget.
Larry: That’s true. Buyers may also walk away from the negotiation if they feel the exhaust price is too high or doesn’t meet their expectations. How do you think exhaust price affects the negotiation process?
Savannah: I think it sets a boundary for the negotiation, helping both parties understand each other’s limits and facilitating the process of reaching a mutually acceptable agreement.
Larry: Exactly. Knowing the exhaust price can streamline the negotiation process and help avoid wasted time and effort. How do you think exhaust price differs from the asking price?
Savannah: The asking price is the initial price set by the seller, while the exhaust price is the lowest price they’re willing to accept after negotiations.
Larry: Correct. The asking price is often higher than the exhaust price to allow room for negotiation. Thanks for the insightful conversation, Savannah.