Throughout most of history prices were set by negotiation between buyers and sellers.
Bargaining is still a spot in some areas. Pricing practices have changed significantly in recent years -Consumer behavior on the other hand is ‘the decision processes and acts of individuals involved in buying and using products or services”. This relationship shows that for a given price as perceived benefit increase, value increases. The prices of product are always is a determinant factor in the behavior of consumer purchase as well as the success or profitability of the firm.How much to charge for a product or service? This question is a typical starting point for discussions about pricing, however, a better question for a firm to ask is – How much do customers value the products, services, and other intangibles that the firm provides? The study sort to among others, To determine how prices affects profitability of the firm, and To study how important customer are sensitive to price. The research is an experimental research, which uses variables to identify cause and effects relationship between variables.