The
value of a thing with real or perceived 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/or 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 likewise 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.