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

A: Prices in a free market are driven mainly by supply and demand. In some markets, the forces of supply and demand lead towards a narrow price range or even to a single price, and it is relatively easy to ascertain a fair market value and hence determine the price differential between the price paid and the fair market value. In our typical commercial setting, however, the market is wide and there are often significant price differences between stores selling the same item. Any price that the majority of sellers would consider a marketable price – one that can still conform to the commercial rules of supply and demand – would be considered a fair market price, even if this seller is the only one to charge such a price. Therefore, most prices charged by stores would still be considered fair market value (Hilchos Mishpat 227).

Ona’ah would apply nowadays if a storeowner overcharged an unsuspecting customer a price that is not marketable, or in a private sale where one of the parties was unaware of the going market price (ibid).