Fixing

AAA

DEFINITION of 'Fixing'

The practice of arbitrarily setting the price of a good or commodity. Fixing represents a refusal to allow the forces of a free market to determine the price of the good. It can be either legal or illegal depending upon who mandates the fix, such as the government or a group of merchants. Although, "fixing" usually refers to "price fixing," it can be applied to input costs or fixing supply. For example, governments can mandate the quantity goods produced in a region.

INVESTOPEDIA EXPLAINS 'Fixing'

Fixing can take many forms. OPEC artificially quadrupled the price of oil in the 1970s and effectively cut off its supply to much of the western world. Cartels are formed for the purpose of fixing the price of one or more of the goods that they produce, such as oil or other commodities. Capitalist governments also fix the prices of certain goods to promote smaller companies to enter the industry.

RELATED TERMS
  1. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  2. Commodity Swap

    A swap in which exchanged cash flows are dependent on the price ...
  3. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  4. Derivative

    A security whose price is dependent upon or derived from one ...
  5. Commodity ETF

    Exchange-traded funds that invest in physical commodities such ...
  6. Welfare Capitalism

    Definition of welfare capitalism.
Related Articles
  1. Early Monopolies: Conquest And Corruption
    Personal Finance

    Early Monopolies: Conquest And Corruption

  2. The Series 3 Exam: Creating A Career ...
    Entrepreneurship

    The Series 3 Exam: Creating A Career ...

  3. Are You Ready To Trade Futures?
    Options & Futures

    Are You Ready To Trade Futures?

  4. When and why did brokerages switch from ...
    Investing

    When and why did brokerages switch from ...

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center