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MSRP

MyWikiBiz, Author Your Legacy — Wednesday April 24, 2019
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The (manufacturer's) suggested retail price (MSRP or SRP), list price or recommended retail price (RRP) (originally, Monroney suggested retail price) of a product is the price the manufacturer recommends that the retailer sell it for. The intention was to help to standardize prices among locations. While some stores always sell at, or below, the suggested retail price, others do so only when items are on sale or closeout.

Suggested pricing methods may conflict with competition theory, as it allows prices to be set higher than would otherwise be the case, potentially negatively impacting consumers. However, resale price maintenance goes further than this and is illegal in many regions.

Much of the time, stores charge less than the suggested retail price, depending upon the actual wholesale cost of each item, usually purchased in bulk from the manufacturer, or in smaller quantities through a distributor.

Suggested prices can also be manipulated to be unreasonably high, allowing retailers to use deceptive advertising by showing the excessive price and then their actual selling price, implying to customers that they are somehow getting a "discount" or a "great deal"Template:Fix.

Game shows have long made use of suggested retail prices both as a game element, in which the contestant must determine the retail price of an item, or in valuing their prizes.

MSRP in the United States

Under earlier U.S. state Fair Trade statutes, the manufacturer was able to impose a fixed price for items. These fixed prices could offer some price protection to small merchants in competition against larger retail organizations. These were determined to be in restraint of free trade. However, some manufacturers have adopted MSRP — a price at which the item is expected to sell. This may be unrealistically high, opening the market to "deep discounters" who are able to sell products substantially below the MSRP while still making a profit. Recent trends have been for manufactures to set the MSRP closer to the "street price" — the price at which items actually sell in a free market.

Automobiles

A common use for MSRP can be seen in automobile sales in the United States. Prior to the spread of manufacturer's suggested retail pricing, there were no defined prices on vehicles and car dealers were able to impose arbitrary markups, often with prices adjusted to what the salesperson thought the prospective purchaser would be willing to pay for a particular vehicle.

Currently, the MSRP, or "sticker price" — the price of a vehicle as labeled by the manufacturer, is clearly labeled on the windows of all new vehicles. The actual price paid to the manufacturer by the dealer (and all rebates/incentives the manufacturer provides to the dealer) is becoming common knowledge. This information is becoming readily available via the internet. This information is helping consumers purchase vehicles with more ease, avoiding any need to shop from dealer to dealer, because the consumer is much more informed than ever before.

Minimum advertised price

Minimum advertised price (also known as resale price maintenance) is the practice of restricting pricing at the consumer level. Price fixing agreements are illegal in many countries when members and terms in the agreement match predefined legal criteria. Fixed pricing established between a distributor and seller or between two or more sellers violates antitrust laws in the United States. A minimum advertised price policy between a distributor and seller is acceptable as long as it is referring to the advertised price and not the selling price.Template:Fix This does not affect a single manufacturer setting the price on a "take it or leave it" basis.Template:Fix

Rack rate

Rack rate is the travel industry term for the published full price of a hotel room, which the customer would pay if he or she walked into the hotel off the street and asked for a room. While lower than the maximum rate that the hotel may be allowed to charge under local laws, it is higher than the rate most travel agents can book for their customers. Sometimes the terms run of the house or walk-up rate are used to refer to the same highest rate. The term rack rate is also used by travel-related service providers, such as car rental companies or travel mobile phone rental companies, to refer to the same highest rate they would charge customers with no pre-bookings.

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