But if I am to publish a short story, how should it be priced?
A general rule is if you have something under 5000 words you should not be asking $2..99. If full length novels are sold for that (and less) why should a short story be priced at that level?
The Science Fiction and Fantasy Writers of America denote word counts for their Nebula Awards as follows:
Novel: 40'000 words and Up
Novella: Between 17,500 and 40,000
Novelette 7,500 and 17,500
Short Story: 7,500 and less
Furthermore, short shorts, or Flash Fiction can be as little as a paragraph... or even less.
I do not believe any author should be giving away their writing unless they write for the pure enjoyment of the craft. If that is your reasoning, do what makes you happy!
If most of your short stories are 2000 words or less and have a similar subject matter, the general advice is to combine them into one sellable collection. That way, you maximize value and produce a more appropriate wordcount in the 3000 to 8000 word range. I still would be wary of pricing this above $1..99 but then there are some that feel that throwing a $.99 cent price tag on anything devalues it immediately. Trial and error, at its best.
I have plans to price my first short story of around 3000 words for $.99 cents. Included, I want to provide a sample of an upcoming collection which I will price higher but also provide a significantly higher word count. I will experiment with word counts and prices and will place progress here as I hope to help others price their work appropriately.