Business, Legal & Accounting Glossary

Definition: Price

Full Definition of Price

price is the amount of money that must be paid in exchange for a product or service. Price is most often thought of in terms of what a consumer has to pay for something.

The term Price, in economics as well as business, refers to the numerical monetary value assigned for a particular good, asset or service. A central concept of microeconomics, price is one of the prominent variables in the price theory or the resource allocation theory. In marketing, price is also equally significant as one of the four variables in the marketing mix that is used to develop a marketing plan by the business people.

Usually applied to refer to a component in a transaction or an exchange between two parties, price is what is given up by one of the parties to obtain a particular good, asset or service offered by another party. The former is the buyer and the latter is the seller. Price, in other words, is the payment a buyer does to acquire something from the seller. However, this definition of price is somewhat limited in its scope.

Nominal Price

Nominal price, which means the monetary value for a good or service. Nominal price is one that is not adjusted against inflation. This means that they are not adjusted to affect the impact of inflation on prices. It may also be described as the price of a particular product in terms of levels of the price that are operational at present.

Relative Price

Relative price, which refers to the exchange ratio between real goods. Relative price may be defined as the financial worth of a particular product or service in terms of another product or service.

Marxian Price Theory

As per Marxian economics price theory has its base in the part of human history that deals in economic transactions between human civilizations. Money prices have also been regarded in Marxian economics as a monetary representation of exchange values.

Price – Important Concepts

Following are some important concepts in the context of price:

  • Parity price
  • Price skimming
  • Price-to-sales ratio – price/sales
  • Settling price
  • Price multiple
  • Price maker
  • Price continuity
  • Purchase price
  • Price improvement
  • Price level targeting
  • Price level
  • Market price
  • Price fixing
  • Price target
  • Price discrimination
  • Opening price
  • Setup price

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Price. Payroll & Accounting Heaven Ltd. September 24, 2020
Chicago Manual of Style (CMS):
Price. Payroll & Accounting Heaven Ltd. (accessed: September 24, 2020).
American Psychological Association (APA):
Price. Retrieved September 24, 2020, from website:

Definition Sources

Definitions for Price are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 27th March, 2020 | 0 Views.