Price is determined by the interaction between supply and demand - the quantity of a good or service available and how much consumers are willing to pay for it. There are several pricing methods a company can use including cost-based pricing, competition-oriented pricing, and demand-based pricing. Following competitors' prices, also known as "going rate" pricing, is a common competition-oriented pricing strategy but it assumes competitors are operating efficiently, which may not always be the case. A company must consider factors like costs, competitors, and demand when determining the best pricing strategy.