Editing Price (section)

{{Short description|Amount of money given in order to purchase a thing or service}}
{{other uses}}
{{more footnotes|date=February 2013}}
{{Economics sidebar}}

[[File:The competitive price system adapted from Samuelson, 1961.jpg|thumb|The competitive price system according to [[Paul Samuelson]]]]
[[File:Wireless in-store price display at a clothing retailer in NJ.jpg|thumb|upright|A price display for a tagged clothes item at [[Kohl's]]]]

A '''price''' is the (usually not negative) [[quantity]] of [[payment]] or [[Financial compensation|compensation]] expected, required, or given by one [[Party (law)|party]] to another in return for [[Good (economics)|goods]] or [[Service (economics)|services]]. In some situations, especially when the product is a service rather than a physical good, the price for the service may be called something else such as "rent" or "tuition".<ref>{{Cite book |last=Schindler |first=Robert M. |url=https://books.google.com/books?id=EnV7ReVVmUUC&q=%22some+situations%22 |title=Pricing Strategies: A Marketing Approach |publisher=SAGE |year=2012 |isbn=978-1-4129-6474-6 |location=Thousand Oaks, California |pages=1–3}}</ref> Prices are influenced by production [[cost]]s, [[supply (economics)|supply]] of the desired product, and [[demand]] for the product. A price may be determined by a [[monopolist]] or may be imposed on the firm by market conditions.

Price can be quoted in currency, quantities of goods or vouchers.

* In modern [[Economy|economies]], prices are generally expressed in units of some form of [[currency]]. (More specifically, for [[Raw material|raw materials]] they are expressed as currency per unit weight, e.g. euros per kilogram or Rands per KG.) 
* Although prices could be [[Sales quote|quoted]] as quantities of other goods or services, this sort of [[barter exchange]] is rarely seen. Prices are sometimes quoted in terms of vouchers such as trading stamps and air miles. 
* In some circumstances, cigarettes have been used as currency, for example in prisons, in times of [[hyperinflation]], and in some places during World War II. In a [[black market]] economy, [[barter]] is also relatively common.

In many financial transactions, it is customary to quote prices in other ways. The most obvious example is in pricing a loan, when the [[cost]] will be expressed as the percentage rate of interest. The total amount of interest payable depends upon credit risk, the loan amount and the period of the loan. Other examples can be found in pricing financial derivatives and other financial assets. For instance the price of inflation-linked government securities in several countries is quoted as the actual price divided by a factor representing inflation since the security was issued.

"Price" sometimes refers to the quantity of payment requested by a seller of goods or services, rather than the eventual payment amount. In business this requested amount is often referred to as the [[offer price]] (or selling price), while the actual payment may be called ''transaction price'' (or ''traded price''). 

Economic price theory asserts that in a free market economy the [[market price]] reflects the  interaction between [[supply and demand]]:<ref>{{Cite web|last=Banton|first=Caroline|title=Theory of Price Definition|url=https://www.investopedia.com/terms/t/theory-of-price.asp|access-date=2021-04-25|website=Investopedia|language=en}}</ref> the price is set so as to equate the quantity being supplied and that being demanded. In turn, these quantities are determined by the [[marginal utility]] of the asset to different buyers and to different sellers. Supply and demand, and hence price, may be influenced by other factors, such as government subsidy or manipulation through industry collusion.

When a [[raw material]] or a similar economic good is for sale at multiple locations, the [[law of one price]] is generally believed to hold. This essentially states that the cost difference between the locations cannot be greater than that representing shipping, taxes, other distribution costs and more.money