Question

What is fixed price with economic price adjustment - FP w/EPA?

Answer 1

FP w/EPA is a contract where the price is adjusted based on economic conditions like inflation, thus protecting both buyers and sellers from unexpected price changes by agreeing on a real price instead of a nominal one.

Step-by-step explanation:

Fixed Price with Economic Price Adjustment (FP w/EPA) refers to a type of contract where the selling price is not static, but rather includes provisions to adjust the price according to changes in economic conditions, particularly inflation. This kind of agreement benefits both buyers and sellers by providing protection against unexpected inflation fluctuations; sellers are safeguarded from being bound to a low selling price, and buyers from a high buying price. Such long-term business contracts establish a real price for the transaction that adjusts for market conditions, as opposed to a fixed nominal price that doesn't account for changes in the purchasing power of money.

Answer 2

Fixed Price with Economic Price Adjustment (FP w/EPA) is a contract in business that allows for price adjustments based on changes in inflation or other economic factors, providing flexibility for sellers and buyers.

Step-by-step explanation:

In business, fixed price with economic price adjustment (FP w/EPA) refers to a contract that sets a fixed price for a product or service but includes a provision for adjustment based on changes in inflation or other economic factors. This type of contract is beneficial for both sellers and buyers as it allows for flexibility in the face of unexpected changes in prices. For example, if inflation is higher than expected, the seller can adjust the price upward, and if inflation is lower than expected, the buyer can benefit from a lower price.