Business Management

What do you think is the best way to go about pricing your product or service?  Why do you think that’s the best way? 

The best way to price a product or service, in my opinion, is too compare it to competitors’ products or services. The market will have a relative price for a certain product, depending on the demand of the market and the supply of the product produced by my business and other competitors. If the product or service is unique and proprietary than the prices will be higher and I would have some control over the market if that product just entered the market.  Other factors also include the quality of the product or service, and how cost effective it can be in order for me to make a sufficient profit margin.  If the quality is lower but the market demands more products at a lower price due to external factors (such as trends relating to the lack of government funding, decline in margins, etc.), then I can potentially sell more products or offer a service for a much lower cost, but have the quality lower due to the lowered standards and expectations of the market. This way I would sell quantity over quality, the opposite of this scenario is also true, in that the higher the quality of a product or service, than the price will be higher, but sold in moderation, meaning that the products are sold in high quality and low quantity. Overall, I believe that the best way to sell a product or service is to keep the price competitive amongst the market/competitors and to decide whether to sell high quality/low quantity, or sell low quality/high quantity (or both depending on the business). This way the prices for the product/service will be more appealing to the consumers.  
Can we come up with a product or two that is both high quality and sells in high quantities?  And is also high priced?
If you price your product higher than the competition, do you just sit back and wait to see if customers will buy it?  Why or why not?