The price of an item is also called the "price point", especially where it refers to stores that set a limited number of price points. For example, Dollar General is a general store or "five and dime" store that sets price points only at even amounts, such as exactly one, two, three, five, or ten dollars (among others). Other stores will have a policy of setting most of their prices ending in 99 cents or pence. Other stores (such as dollar stores, pound stores, euro stores, 100-yen stores, and so forth) only have a single price point ($1, £1, €1, ¥100), though in some cases this price may purchase more than one of some very small items.
In economics, market price is the economic price for which a good or service is offered in the marketplace. It is of interest mainly in the study of microeconomics. Market value and market price are equal only under conditions of market efficiency, equilibrium, and rational expectations.
On restaurant menus, "market price" (often abbreviated to m.p. or mp) is written instead of a specific price, meaning "price of dish depends on market price of ingredients, and price is available upon request", and is particularly used for seafood, notably lobsters and oysters.
The paradox of value was observed and debated by classical economists. Adam Smith described what is now called the diamond – water paradox: diamonds command a higher price than water, yet water is essential for life and diamonds are merely ornamentation. Use value was supposed to give some measure of usefulness, later refined as marginal benefit while exchange value was the measure of how much one good was in terms of another, namely what is now called relative price.
In late 2013, William Nordhaus, president of the American Economic Association, published The Climate Casino, which culminates in a description of an international “carbon price regime.” Such a regime would require national commitments to a carbon price, but not to a specific policy. Carbon taxes, caps, and hybrid schemes could all be used to satisfy such a commitment. At the same time Martin Weitzman, a leading climate economist at Harvard, published a theoretical study arguing that such a regime would make it far easier to reach an international agreement, while a focus on national targets would continue to make it nearly impossible. Nordhaus also makes this argument, but less formally.
Firms use price discrimination to increase profits by charging different prices to different consumers or groups of consumers. Price discrimination may be regarded as an unfair practice used to drive out competitors
In oligopoly markets prices can become 'sticky' because if the price rises, competitors will not follow the rise. So the merchant will lose its market share to its competitors on lower prices. But if the price falls, other players will merchants will follow suit if they can. At some point, merchants find that they can not gain profit if they cut the price further— so the sticky price remains.
In 2002, a memorial was unveiled on Sainte-Anne between the Price Building and its right-hand neighbour (67–71 Sainte-Anne Street, a set of rowhouses). The memorial (Mémorial Price) is in the form of a sculpture, entitled "L'Homme-Rivière" ("The River-man"). It was sponsored by the CDP and the Virginia Parker Foundation, and designed by Quebec City artists Lucienne Cornet and Catherine Sylvain.
A price ceiling is a price control, or limit, on how high a price is charged for a product, commodity, or service. Governments use price ceilings to protect consumers from conditions that could make commodities prohibitively expensive. Such conditions can occur during periods of high inflation, in the event of an investment bubble, or in the event of monopoly ownership of a product, all of which can cause problems if imposed for a long period without controlled rationing, leading to shortages. Further problems can occur if a government sets unrealistic price ceilings, causing business failures, stock crashes, or even economic crises. In unregulated market economies, price ceilings do not exist.
While price ceilings are often imposed by governments, there are also price ceilings which are implemented by non-governmental organizations such as companies, such as the practice of resale price maintenance. With resale price maintenance, a manufacturer and its distributors agree that the distributors will sell the manufacturer's product at certain prices (resale price maintenance), at or below a price ceiling (maximum resale price maintenance) or at or above a price floor.
Similar views have previously been discussed by Joseph Stiglitz and have previously appeared in a number of papers. The price-commitment view appears to have gained major support from independent positions taken by the World Bank and the International Monetary Fund (IMF). On June 3, 2014, the Bank began circulating a statement for countries and businesses to sign, which advocated “putting a price on carbon” to reduce global warming. It specifies that countries could use either emissions trading or carbon taxes to price carbon.
Price stickiness is extremely common among large supermarket chains and prices, especially for commodities, tend not to vary much between them. Many of the supermarkets monitor price changes in other supermarket chains and vary their prices accordingly until they reach the point where any further decrease in their price will affect profits.
A price floor is a government- or group-imposed price control or limit on how low a price can be charged for a product, good, commodity, or service. A price floor must be higher than the equilibrium price in order to be effective. The equilibrium price, commonly called the "market price", is the price where economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change, often described as the point at which quantity demanded and quantity supplied are equal (in a perfectly competitive market). Governments use price floors to keep certain prices from going too low.
The subhedging price is the greatest value that can be paid so that in any possible situation at the specified future time you have a second portfolio worth less or equal to the initial one. Mathematically it can be written as. It is obvious to see that this is the negative of the superhedging price of the negative of the initial claim (-\rho(X)). In a complete market then the supremum and infimum are equal to each other and a unique hedging price exists. The upper and lower bounds created by the subhedging and superhedging prices respectively are the no-arbitrage bounds, an example of good-deal bounds.
Sometimes invoice price is used to indicate the trade or wholesale price although they are not the same. The wholesale or trade price is the price at which goods are sold to shops by the people who produce them, rather than the price which the customer usually pays in the shop.
Two common price floors are minimum wage laws and supply management in Canadian agriculture. Other price floors include regulated US airfares prior to 1978 and minimum price per-drink laws for alcohol. A related government intervention, which is also a price control, is the price ceiling; it sets the maximum price that can legally be charged for a good or service, with a common example being rent control.
This is the price businesses charge to trade buyers. This is their cost price plus a mark up or profit margin. As a guideline: this is normally around 2 x the cost price. But if the cost price is relatively high then it’s less. So for example if your cost price would be £150, then your trade/whole sale price would be around £250.
Simplified it could be called the cost of a good sold by a wholesaler. The wholesaler will usually charge a price somewhat higher than he or she paid to the producer, and the retailer who purchases the goods from the wholesaler will increase the price again when they sell the good in their store. That price is usually called the manufacturer's suggested retail price (MSRP), list price or recommended retail price (RRP) of a product and is the price which the manufacturer recommends that the retailer sell the product for. The retail price is normally around 2.5 to 3 x the trade or wholesale price, depending on the mark up of the retailer since the retailer really needs this markup to cover their own higher overheads such as the shop rent, taxes, business rates and staff.
Price cutting, or undercutting, is a sales technique that reduces the retail prices to a level low enough to eliminate competition. Businesses will implement this as a way to under-cut the competition and offer the best price to the consumer.
The following table shows variations in the posted price and the revenue received by OPEC countries between 1964 and 1975 (in US dollars):