price (redirected from a price on head)

price

The dollar amount at which a security trades. Stocks are nearly always quoted fully (that is, $25 means $25 per share), while bonds are ordinarily quoted as a percentage of par value (that is, 98 represents $980 per $1,000 par bond).

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Price

The value of a thing having or believed to have worth. Price represents the amount of value the market has assigned — fairly or unfairly — to a good or service. Normally, prices are expressed in terms of money, but practices such as countertrade and PIK securities indicate that prices may be expressed in goods: "four chickens for two sheep." Price is a necessary component of trade.

Prices tend to be regulated by the law of supply and demand; that is, a price of a good or service increases with smaller supply and greater demand. A corollary to this is the idea that commoditization drives prices down because it increases supply (sometimes vastly) while leaving demand the same. Prices rise when the value of money declines. Governments can and have controlled the prices of certain goods and services by subsidy or decree. This is usually an anti-inflationary measure, and tends to distort, rather than eliminate, the law of supply and demand. It is thus not generally sustainable as a mechanism for controlling price.