In the economy, a fixed price is a price that is defined differently in different domains of competence, and that is either set by the authorities through legal conventions or set by contract in the private sector, and that cannot be undercut or exceeded. Keeping your prices fixed makes your offer more calculable for your customers and your company. On the other hand it reduces your flexiblity in dealing with fluctuations regarding demand or occupancy.

When and how to apply Fixed Prices:

The idea behind a fixed price is to reduce customer uncertainty regarding the final price, which may be caused by market fluctuations, time-frame variables, or potential changes in the project's scope. A fixed price indicates to the customer that the company, not he, bears the risk of rising internal costs. Nevertheless, a fixed price alone may not be sufficient to convince customers to return. For a company's fixed-price strategy to be effective in a competitive environment, additional incentives or contract provisions may be necessary.

Well-known companies that use this pattern are Forbes and Tata Nano.