Week 1 — What Is a Price?

Does a product have one true price? An introduction to sticker, reference, sale and market price, and to the $249 headphones this semester keeps returning to.

27 July 2026

Core question#

Does a product have one true price?

Walk into a shop and one product seems to have one price. It doesn’t. The same pair of headphones can have several prices at once:

• a sticker price — the number printed on the tag today
• a reference price — a higher number (“was $329”) the sticker is set against, whether or not anyone ever actually paid it
• a sale price — a temporary number, valid until a date nobody reads
• a market price — what the same or a near-identical item sells for elsewhere, right now
• a willingness to pay — the most a specific buyer would hand over before walking away, which has nothing to do with the tag at all

None of these numbers has to be fake. They are different ways to talk about the same product, and the retailer chooses which one to make loud.

Comparison framing#

Consider two identical-looking deals:

• A: was $200, now $100 — 50% off
• B: $95, no discount shown

Most people’s first instinct is that A is better, because “50% off” is the loudest number on the page. But B costs less. The 50% figure is comparing A with its own “was” price, not with the next-best option. Much of this course is about asking a simple question: compared to what?

The $249 headphones#

This semester follows one purchase: a pair of over-ear headphones currently priced at $249. Every week adds one more piece of information that changes how “$249” should be read — a bundle, a reference price, a price history, a loyalty scheme, a resale market, a possible future sale. Today, $249 is all we know, and that is exactly the trap: a single number, with no context attached, looks like the whole answer. By Week 12 it will look like only one small part of the decision.

The headphones, their $249 price, and every number attached to them over the next twelve weeks are invented for teaching. No real product is being described, and none of these figures should be cited as evidence about real prices.

Learning outcomes#

By the end of this week, you should be able to:

• name at least four different things “price” can mean for the same product
• explain why a reference price and a market price can legitimately disagree
• identify which of the five readings a specific number on a tag is playing
• explain why “50% off” is a claim about a reference price, not about value
• state the semester’s running scenario in one sentence

Before class#

Find one real price tag, receipt, or online listing you’ve seen recently that shows a “was” price next to a “now” price. Write down both numbers and, if you can find one, a place the same or a near-identical item sells for a different price. Bring the numbers, not just the badge.

In class#

In pairs, swap the numbers you brought. For your partner’s example: which of the five readings of “price” (sticker, reference, sale, market, willingness to pay) is doing the most work on a shopper, and which one is basically invisible on the tag? Be ready to defend your answer in one sentence.

What you should leave knowing#

A price is not one fact about a product. It is a choice about which number to print in the largest font. Every later week questions one of those numbers.

Where this goes#

Week 2 asks a narrower version of the same question — is the bigger pack actually the better buy — and Week 3 asks what a discount is a discount from. Both are the sticker-price question again, wearing a different coat.