Monthly Average Price (MAP) is a pricing mechanism that uses the arithmetic average of daily prices over a calendar month to determine final transaction prices. This method smooths short-term price volatility and provides more predictable pricing for both buyers and sellers. MAP pricing is common in commodity markets and long-term contracts.

MAP pricing reduces the impact of daily price spikes or temporary market dislocations while maintaining market-based pricing mechanisms. This approach is particularly useful for budgeting and planning purposes, though it may not reflect actual spot market conditions on specific days. Understanding MAP calculations helps assess contract value and risk exposure.

Real-world example: A power plant purchases natural gas using Henry Hub MAP pricing, with January delivery priced at $4.25 per MMBtu based on the average of all trading days in January, providing stable budgeting despite daily price volatility.