What Is Bandwidth And How Is It Priced?

Bandwidth is the speed that a computer connects to the net. The price depends on the speed of the connection i.e. dialup or broadband. So, my question is this, when a company "buys" bandwidth are they buying bandwidth space, i.e so many gigabites allocated over so many households or, are they buying a specfic constant speed based on the number of households they wish to provide the service to? Could someone please explain how this works. Thanks.