Q: How is the “fair market price” determined?

A: One way is through the imposition of a set price through government regulation. This exists sometimes with food staples, such as bread, or with various utility or transportation tariffs. The other way is through the free market forces of supply and demand.

When there is a single, set price, there is ona’ah (unfair value) when deviating from this price. The generally accepted opinion is that for a set price there is ona’ah even for a minimal price deviation, because there is no room there for price differences (Aruch Hashulchan 227:2, but see Machaneh Ephraim, Ona’ah #7). Therefore, if the government raised or lowered prices, and one party was unaware and bought or sold at the old price, the hurt party can claim ona’ah to receive the difference or revoke the sale, depending on the degree of deviation.

In a few free markets, the market forces also lead to a single fixed market price, such as for precious metals. The above rules apply there, too. Usually, though, there is a range of prices within the market and a different set of rules applies and is the subject of next week’s column.