The amount of money paid per unit for a good or service. This is easy to observe for many goods and services: in any ordinary shop, customers will find displayed a price at which as many or few units as they wish can be purchased. For some goods and services, however, price is less easy to observe. Special terms may be available for large orders, for repeat orders, or for particular types of customer. In some markets buyers and sellers haggle over the price of each item. The price of similar goods varies over time and place, and goods with the same name vary in quality. A price index measures the prices of goods of some specified type: for example, consumer goods, raw materials, or exports. Wholesale prices are the prices charged by wholesalers; factory gate prices are the prices charged by manufacturers.

The price mechanism refers to the role of prices in organizing the production and distribution of goods and services in an economy: the prices people are willing to pay convey information about the valuation they put on different goods and services, and the prices charged by suppliers convey information on how they value the effort and inputs needed for production. Shadow prices are the prices that economic model-builders believe would need to be charged if consumers and producers were to be induced to take full account of external costs and benefits.

In national income accounting, market prices are the prices consumers pay. The prices facing producers, equal to market prices minus indirect taxes plus subsidies, are referred to as factor cost. Current prices are the prices prevailing at the time when transactions take place; constant prices are the prices of some chosen base period, used to revalue transactions to obtain a measure of real activity.

See also:

administered price, ceiling price, closing prices, current prices, distorted prices, exercise price, exit price, factor prices, flexible prices, floor price, forward price, law of one price, market prices, mid-market price, opening prices, relative prices, shadow prices, spot price, shut-down price, sticky prices, and strike price

• implicit contract
• implicit function
• importables
• import control
• import deposit
• Import Duties Act, 1932
• import duty
• imported inflation
• import levy
• import licence
• import penetration
• import propensity
• import quota
• import restriction
• imports
• import substitution
• import surcharge
• import tariff
• imputation system
• imputed charge for consumption of non-trading capital
• imputed income
• IMRO
• incentive-compatibility
• incentives
• incidence of taxation