market price

The actual price paid in a market transaction. Contrast with Market Value.
Example: A home was offered for sale at $100,000. It was appraised for $93,000, and actually sold for $95,000 in an Arm's Length Transaction. The market price is $95,000.

1. Price at which the seller and the buyer agree to trade on the open market.

2. In Transfer Pricing, best transfer price (i.e., the price that will maximize the profits of the company as a whole), under the following conditions: (1) a competitive market price exists; and (2) divisions are independent of each other. If divisions are free to buy and sell outside the company, the use of market prices preserves divisional autonomy and leads divisions to act in a manner that maximizes the profits of the company as a whole.

"established by public sales or sales in the way of ordinary business," 171 N.E. 2d 207, 213; "figure fixed by sales in ordinary business transactions, established when other property of the same kind and in the same or comparable location has been bought or sold in so many instances that such value may reasonably be inferred," 120 A. 2d 77, 80. This price is based on a theoretical transaction between a free seller and buyer dealing at arm's length. 367 F. 2d 104, 110. This term is synonymous with actual valuation, actual value, market value, and fair value. In determining a buyer's damages for nondelivery or repudiation of goods, "market price is determined as of the place for tender or, in cases of rejection after arrival or revocation of acceptance, as of the place of arrival." U.C.C. §2-713(2).

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