EconomicsPrice escalation is the increase in price that occurs when a good is exported to a foreign market due to shipping costs, tariffs and distribution channels.
ContractsA price escalation clause is a term in a contract that allows a price to be increased or renegotiated if prices for inputs increase. For example, a construction contract that can be renegotiated if the cost for materials rise beyond a certain point.
|Overview: Price Escalation|
|Definition (1)||A difference in price for an identical good in different markets due to supply chain variations such as shipping costs, tariffs and distribution channels.|
|Definition (2)||A contract term that allows prices to be increased or renegotiated if the cost of an input rises beyond a certain point.|