Regulated, Catalog, and Market Prices

Regulated, Catalog, and Market Prices

 

Prices Set by Law or Regulation

 

When the price is set by law regulation, the supplier must identify the regulating authority and specify the regulated prices. With regulated prices, a governmental body has determined that the prices of certain goods and services should be controlled directly. Normally, approval of prices changes requires a formal review, hearings, and an affirmative vote of the regulatory authority. No supplier may charge more or less than the approved price.

 

Catalog Price

 

An established catalog price is a price that is included in a catalog, a price list, or some other place that is regularly maintained by the supplier. The price sources must be dated and readily available for inspection by potential customers. The buyer should request a recent sales summary demonstrating that significant quantities are sold to a significant number of customers at the indicated price before accepting a catalog price. See Appendix B for the role of discounts in pricing.

 

Market Price

 

A market price results from the interaction of many buyers and sellers who are willing to trade at a given (market) price. The forces of supply and demand establish the price. A market price generally is used for an item or a service that is generic in nature and not particularly unique to the seller. Prices for eggs and lumber, for example, are based on the market. Normally the daily market price is published in local newspapers or trade publications that are independent of the supplier.