Fixed price refers to a pricing model or contract where the agreed-upon price for a product or service remains constant throughout the duration of the contract, regardless of any cost fluctuations or changes in market conditions. Under a fixed price arrangement, the buyer and seller agree on a set price that will not be subject to adjustments or variations based on factors such as labor costs, material prices, or unforeseen expenses. This type of pricing structure provides predictability and stability for both parties involved, as the buyer knows the exact cost upfront, and the seller assumes the risk of any cost overruns or changes in expenses during the contract period.