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Price refers to the amount that an ordinary customer pays for goods he purchases or for
services he avails. Likewise, wage refers to the amount of money an employee receives in
consideration for a job he has performed. Price and wage have a common denominator, that is,
both of them are considered compensation. Thus, it may be said that the problem of fair price
may be resolved by relating it to fair wages.
The problem in price and wages is how to determine them so that they will be fair to
everybody ±entrepreneur, producer, seller and consumer. Different factors must be considered
in determining what price should be assigned to the products being sold and how much wage
should be given in consideration for the job done by an employee. Due to the different factors
that may vary from case to case, problems regarding the determination of fair price and fair
wages arise.

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 Problems regarding the setting of price and what constitutes fair price have not been
resolved even up to the present. This is the reason why various price theories have evolved
from business practices. In fact, there are various price theories that are being considered in
pricing one¶s products and services.
One of these theories is the theory that holds that a man is entitled to enjoy the fruits of
his labor and may therefore establish any price he pleases for the goods he has produced. This
theory implies that every businessman may establish a price for their products according to their
own discretion depending upon how they have brought theirs products into their selling
conditions. For example, a manufacturer of a television may sell his product for 5,000.00 while
another manufacturer may price an identical product for 3,000.00 only.
Another theory holds that fair price is one obtained by fair competition in an open
market. An open market is one that is accessible to many people prepared and willing to serve
and be served and is not artificially closed by ignorance or by a price control law. This theory
submits to the law of supply and demand which follows the following rule: the more the supply,
the less is the price; the less the supply, the higher the price; the higher the demand, the higher
the price; and the less the demand, the less is the price (this is in consideration of the statement
³ceteris paribus´ or ³all other things held constant´).

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Every businessman enters a business in consideration to receive something (profit) from
what he has invested. It is believed that if you want to get a higher profit, then, a higher price
must be established. But in pricing a product or a certain service, the businessman should
consider that the price is fair enough to his/her consumers. Businessmen should consider that
fair price is directly related to the determination of fair return.
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 What is fair return is difficult to determine since it
varies with each industry. However, the return established as fair for one industry should be fair
for all members of that industry. For an instance, a 50,000 return monthly is considered fair
enough for businesses in the fishing industry. Thus, if RD fishing group earns 50,000 monthly,
no question with regards to the fairness of its earnings will arise. It is believed that the higher the
investment and the higher the risks that may be encountered in doing business, the higher is the
expected return for the said business. For an instance in the same example, a 50,000 return
monthly may be considered fair enough for businesses in the fishing industry but may not be fair
enough for businesses in the oil exploration industry.
Generally, the pricing structure of a business is considered fair when its profit is equal to
the average profit in the same industry for the same amount of capital and total resources used.
Thus, if the industry earns 40% return considering all the capital and resources it has incurred,
and the profit of a company having the same capital and resources is used is just 5%, then, it
may be said that the company does not have a fair return and correspondingly may not have a
fair price for its products and services.
In order for you to achieve the proper determination of fair return, you have to establish
the value of the capital on which the return will be based. There are two commonly used bases:
1. Equity or capital ± it is considered as the preferred basis since it is usually
comparable with amounts that may be invested in alternative investment schemes.
2. Total value of assets used ± it may be used in determining fair return in the sense
that it directly corresponds to the amount of resources you use in manufacturing a
product or rendering a certain service to the consumer.

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  In a fixed price system, the seller is
expected to establish the lowest prices for his goods and the customer is in turn expected to
take or leave them at the price quoted. Fixed price system results to the following advantages:
speed, equality for all consumers, minimum prices and honesty between seller and buyer.
Fixed price system has certain requirements in order to achieve a generally fair price for
consumers and therefore making it relatively ethical. These are the following:
1. The seller must give his final price. If a seller offers a secret discount, he violates the
requirements of a fixed price system. For an instance, a bookstore giving discounts
to some of its customers but do not give discounts to other customers.
2. The fixed price should be the same for all buyers. For example, if the computer set is
worth 50,000.00, then, it should be sold to the customers at 50,000.00,
notwithstanding who that customer is. If the seller sells the computer set for
45,000.00 because the buyer is his cousin, then, he violates the requirements of a
fixed price system.
However, it must be noted that fixed price does not mean charging the same price in
different localities. For an instance, the price of fruits in Metro Manila may be higher compared
to the price of fruits in General Santos City. A fixed price scheme just means the same price for
a particular product is charged for all buyers in each store.


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   One of the ways in determining a price for a
certain product is bargaining. If you are a buyer, you would opt for the smallest price possible.
On the other hand, if you are the seller, you would opt for the highest price possible. It may be
said that the price arrived through bargaining may be considered fair since it happens in an
open market. We have to admit that the movable price system which makes the bargaining
possible is indeed time consuming due to the ³haggling´ process which may last for more than
an hour. For an instance, in General Santos City, every February, numerous ³tiangge´ are
temporarily established at the Oval Plaza. Bargaining process usually happens here.
""$ In order to determine fair price, some businessmen use the bidding process. In
this process, bidders are expected to name their final price which is the minimum they are
willing to accept. The price of the lowest qualified bidder approximates that of fair price. For an
instance, you want to buy the property sold by a certain seller, then, you have to give that seller
the amount you are willing to pay for that property, then, the seller will decide whether he
accepts or rejects your offered price.


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 There are various pricing practices which businessmen exercise. Some practices may
be considered ethical while some are not. Techniques in pricing which result in unethical
practices include the following:
1. )

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*%. The price varies with each buyer depending on whether he is
a favored customer or he has bargaining ability. This is considered unethical since it
does not portray fairness to all possible consumers. For an instance, a manufacturer
of a television normally sells his television for 50,000.00. If he sells the television at
100,000.00 because Manny Pacquiao is the buyer, then, it is considered unethical.
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the better known and better quality products, even if they could be sold at a lower
price. For example, a brand new Nokia 3310 is worth 50,000.00. If the manufacturer
of 2nd hand Nokia 3310 sells his product for 50,000.00, then, it may be considered
unfair, thus, unethical.
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9.99 instead of using whole numbers such as 9.00 or 10.00. This practice makes the
consumers believe that he is buying a product at a cheaper price. This is usually
seen in the mall.
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$  This pricing technique quotes some well known items at a
lower price while other goods are at regular price. This makes the customer believe
that all articles being sold in the store are on sale. If you see that Jag, BNY, Lee, and
other branded clothes have their price reduced, you may have the idea that all the
other items being sold are also in its reduced price. But in fact, they¶re not.

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Fair wage and salary is indeed difficult to determine especially in times of inflation. As
inflation strikes, the prices of commodities go up. Due to this, employees and workers demand
for higher compensation in the form of their salary and wages in order for them to cope up with
the increasing prices of the commodities.
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 The fairness of an employee¶s wage depends on whether the wage-setter considered
the following factors:
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idea that the more difficult and more complex the job an employee does, the higher
compensation he gets. The less difficult and less complex the job an employee
performs, the lesser compensation he gets. Thus, in establishing fair wages,
 businessmen should consider the complexity of the job and reward compensation
that is fair enough to pay the efforts of the employees or workers.
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 The employee should be paid in accordance with law and
the regulation issued by the government. Minimum wage has been established by
the government in an attempt to establish a fair wage, but it does not mean that the
minimum wage may be considered a fair wage. This is due to the changes that
happen in the economy especially during the period of inflation.
0  c#'$ A wage is considered fair if it meets the increase in the cost of living
of certain geographic location. The higher the cost of living, the higher the salary or
wage an employee should get. For an instance, in a country where the cost of living
goes up by 20%, the employer should also adjust the level of wage by 20% up. The
failure of the employer to do so may lead his employees suffer difficulty in meeting
his daily needs. However, employers find it difficult to meet this requirement that is
why numerous strikes are being initiated by employees. 
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  Paying your employee the same rate as other
companies pay their employee may result to fair wages. However, since companies
vary in some ways, there are certain situations where doing this technique may not
lead to fair wages. That is why careful assessment as to the fairness of the wage
paid by other companies to their employees should be exercised before following
their business practices with regards to payment of wage and salary.
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 The wage and salary that has been
established should be fair to both employees and employers. They have to consider
the fact that wages should not be so high that nothing is left for the owners of the
business as compensation for their risks and efforts in establishing the business.

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 There are different methods by which wages may be established.
1. It may be determined unilaterally by the owner of the business.
2. It may be determined through discussion between the employee and his boss.
3. It may be done through collective bargaining agreements.
4. It may be done through job evaluation and merit increases.




 
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 The fact that all the factors for wage determination have been considered in the
establishment of wage does not guarantee that the employee will receive a fair wage. There are
certain practices in business which deny the payment of fair wage to the employees:
1. Asking the employee to sign a payroll that shows he is being paid a fair wage but in
fact he receives less than what is stated in the payroll sheet.
2. Asking the employee to work a full day but securing his agreement that he be paid
only for half day¶s work.
3. Requiring an employee to work on a holiday but paying him only the pay for a regular
day.
4. Agreeing to advance the employee¶s wage in kind but the goods that the employee
receives in lieu of his advance wage are priced at least 50% higher than regular
price.