Fixed Price

You go to a garage sale and find a lawn mower blade you like. The price tag reads $2, but it’s a little rusty and appears to have something stuck to it resembling dried blood. So, you offer $1. The person running the sale thinks about it for a second and, after a little hemming and hawing, agrees.

That process is negotiating...the price can change based on a discussion between parties. The opposite of a fixed price.

You head to a garage sale down the street. You find a lampshade you want, priced at $0.50. Based on your previous experience, you try to negotiate. You offer a quarter. This person says “no” right away. “Prices are non-negotiable,” he snarls. In other words, they are fixed.

You give in and pay the $0.50, heading home with your lampshade and your lawn mower blade.