✏️ Exciting News: Our website is getting a fresh new look - stay tuned! 💻

flip logo white rgb
Book now

Who sets prices?

Discount price tag from 0.99 to 999.99 dollar set. Special sale offer advertising with price-off label template. Save money with clearance purchase shop product price sticker. Vector illustration
scroll down ancher
Why do things cost what they cost?
Many articles are getting more expensive, but some may become cheaper too. Why is that so?
How much does a scoop of ice cream cost?
Let’s look at this example: Everybody likes ice cream. And we are willing to pay for the treat. But how much?

How much are you prepared to pay?

Most people do not want to pay more than 1.60 euro for a scoop of ice cream. Some people are prepared to pay more than two euros for a scoop of very good ice cream. But hardly anyone would be willing to pay more than ten euros.

At what price ist he seller prepared to sell?

Ice cream vendors want to earn an income, of course. They have already spent some money: for an ice-cream cart, an ice-cream machine, ingredients, cones, etc. And they have to be able to live on the earnings from their business. When calculating the price of a scoop of ice cream, the vendors have to take into account all their costs and the profit they want to make. Of course they would be delighted if they could ask ten euros per scoop. But at this asking price, they wouldn’t find any customers. So they are usually prepared to sell their ice cream at 1.60 euro per scoop if that is enough to cover their expenses.  
The law of supply and demand
When people want to buy more ice cream (demand) than is on sale in the market (supply), the price rises to the point where it is too expensive for enough prospective buyers. But if there is more ice cream (supply) than people want to eat (demand), the price must go down until enough people are interested in buying ice cream. Prices can be higher if there are only very few places that sell ice cream in a given area. You may have noticed this already: At a seaside kiosk ice cream usually costs a lot more than in a supermarket. Because many people fancy an ice cream when they are at the seaside, but there is usually only one kiosk, the seller can ask higher prices – and people will pay them.
When goods are scarce, their price will rise
What is true of ice cream also applies to other products and services. So prices rise whenever the supply of goods diminishes. This is true across all sectors of the economy: when night frosts hit the apricot orchards in the Wachau region in May, the harvest may be very poor. And if there are fewer apricots to buy, their price goes up.

FAQ

The price is created by the interplay of supply and demand. If many people want to buy something, the price rises. If there is too much of it, it falls.
In addition to the ingredients, fixed costs such as rent, staff and equipment also count. Demand also plays a role – for example, ice cream at the lido is often more expensive than at the supermarket.
If demand is greater than supply, prices rise. If supply is greater than demand, prices fall – until equilibrium is reached.
If a product becomes scarce – e.g. due to poor harvests or supply problems – the price rises. This happens, for example, with apricots after frosty nights in the Wachau region.
Probably not. Sellers have to set their prices in such a way that they cover their costs and still find customers – so the price is usually around €1.60.

Subscribe to our newsletter*!

Stay up to date with our newsletter –
subscribe for new tour dates and important updates.
*only available in German
Register now

Mehr zu All about money

Pocket Money Guide
All about money, Money & Happiness

Pocket Money Guide

Taschengeld als Instrument: Kinder und Jugendliche lernen den Umgang mit Geld Kinder und Jugendliche lernen den Umgang mit Geld. Welche Dinge gibt es dabei zu beachten?
Read now
Why do we pay with euros?
Money & Society

Why do we pay with euros?

The euro is the common currency of 19 EU member states and six other European countries. In Austria, we have been paying with euros since 2002. Despite some criticism here and there, the story of the euro is a success story. How come?
Read now
Designer clothes<br>Do you really need them?
Money & Happiness

Designer clothes
Do you really need them?

Branded clothes are “in”, but are they worth the money? Or is the saying true: “Buy cheap, buy expensive?”
Read now
Choosing an occupation
Education & Career

Choosing an occupation

When you leave school, you may still want to become a prince or princess, or maybe a racing driver – but most people tend to opt for other professional fields.
Read now
How does a banking crisis come about?
Banks & Economy, Money & Society, Debts

How does a banking crisis come about?

The banking business is associated with certain unavoidable risks. What happens when banks go bust?
Read now
The right to your own account
Money & Society, Account & Payment, Debts

The right to your own account

Living without a bank account is possible, but it is difficult. The European Union has therefore decided that every person has a right to an account.
Read now
Fixed costs – electricity and gas
Account & Payment, Debts

Fixed costs – electricity and gas

You want to save ten euros each week. But how to get started?
To decide that, you first need to know what your fixed costs, or fixed expenses, are.
Only if you know how much money you need to spend each month
will you be able to find out what your potential savings could be. To decide that, you first need to know what your fixed costs, or fixed expenses, are. Only if you know how much money you need to spend each month will you be able to find out what your potential savings could be.
Read now
Apprenticeship
Education & Career

Apprenticeship

Thinking about doing an apprenticeship? We have some good reasons for you why an apprenticeship might suit you.
Read now

Subscribe to FLiP News

Updates on exhibition, program & events

Subscribe to FLiP News

Updates on exhibition, program & events