Abstract
Predicting firms; behavior and reactions to events is central for current microeconomics. Economists have put forward many theories to analyze the behavior of firms, main decisions of economic interest related to outputs, investment, and technology and above all prices which are the object of this essay. Price can be defined as "the value of the goods, or the money that must be paid to acquire a good or service" or, more economically by the average revenue, which corresponds to the total revenue / total output. Generally, it corresponds to the intersection point of the demand and the supply curves. The aim of this essay is to analyze and critically discuss the main factors that determine product prices in the UK. I shall argue that the prices depend on the firms' objectives and market structure but more importantly on costs and the firms' strategies.
