Price is the exchange value of a good or service. Oil prices became higher so oil competitors started to manufacture oil at a lower price by using sands and other expensive processing methods, so the owners of real own in the middle east were forced to lower their prices. Not-for-profit organizations set prices high to cover expenses and to cover unforeseen needs and expenses. Economic theory that firms will behave rationally that this rational behavior will result in an effort to maximize gains and minimize losses. Some marketers estimate profits: looking at historical sales data using elaborate calculations based on predicted future sales. *balance between desired profits and the customer"s perception of a product"s value will be successful. Marginal analysis method of analyzing the relationship among costs, sales price, and increased sales volume. Profit maximization point at which the additional revenue gained by increasing the price of a product equals the increase in total costs.