MSRP is Manufacturer's Suggested Retail Price, which is generally published for every product the manufacturer sells. This is NOT the price the store pays, nor is it necessarily the price the consumer pays.

The primary purpose of MSRP is for each product to have a widely published price so that the consumer can tell he or she is not being ripped off by a ridiculous markup.

The problem is, MSRP generally already includes a ridiculous markup; IE, the highest markup a store could be expected to charge. This is good for stores because it allows for flexibility in choosing a selling price that isn't over MSRP, as well as making consumers think they are saving bundles of money when really they're just paying a 20% markup rather than 100%.

For this reason, actually charging MSRP as a purchase price is not very common. Usually stores sell their product at a good percentage below MSRP. In general, if you pay MSRP on any item, you are being ripped off.

Some stores, especially small ones, still charge MSRP on a large number of their products. For instance, at a small electronics shop in a mall, you may pay $299 for the same DVD player you could get at Best Buy for $249. This is probably why those small stores are usually so empty.

The price paid by a consumer is usually called the street price; the price paid by the retailer for each item is the wholesale price or dealer invoice if the item is a vehicle.

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