Við prúttum um verðið.

Prúttum is the 1st person plural present form of the verb að prútta, meaning to haggle / bargain.

So:

• að prútta = to haggle
• við prúttum = we haggle / we are haggling

The ending -um is the normal present-tense ending here for við (we).

A few present-tense forms:

• ég prútta
• þú prúttar
• hann/hún/það prúttar
• við prúttum
• þið prúttið
• þeir/þær/þau prútta

It can mean either, depending on context.

Icelandic often uses the simple present where English might use either:

• we haggle
• we are haggling

So Við prúttum um verðið can naturally mean We haggle over the price or We are haggling over the price.

If you want to make the right now meaning more explicit, Icelandic often uses vera að + infinitive:

• Við erum að prútta um verðið. = We are haggling over the price.

Um often means about, around, or concerning, but with að prútta it is best understood as over in English:

• prútta um verðið = haggle over the price

So this is a good example of how prepositions do not match perfectly from one language to another. A literal English gloss with about is possible for understanding, but over the price is the more natural translation.

Because Icelandic usually puts the definite article onto the noun instead of using a separate word like English the.

• verð = price
• verðið = the price

So verðið is simply verð plus the suffixed definite article.

It is in the accusative, because um takes the accusative case.

Here that may not look obvious, because verð is a neuter noun, and in the singular its nominative and accusative forms are the same.

So:

• nominative definite: verðið
• accusative definite: verðið

Same form, different grammatical function.

Yes, here Við is definitely the pronoun we.

That is a very good question, because við can also be a preposition meaning things like with, by, or at, depending on context.

How do you know which one it is here?

Because in Við prúttum um verðið:

• Við comes first as the subject
• it is followed by the finite verb prúttum

So the structure is clearly:

• Við = we
• prúttum = haggle

Compare:

• Við prúttum um verðið. = We haggle over the price.
• við borðið = by the table

Same spelling, different job.

Usually, no.

Unlike languages such as Spanish or Italian, Icelandic normally keeps the subject pronoun in an ordinary sentence.

So the normal form is:

• Við prúttum um verðið.

Even though prúttum already tells you the subject is we, Icelandic still usually says við.

Yes.

You can use:

• prútta um eitthvað = haggle over something
• prútta við einhvern = haggle with someone

And you can combine them:

• Við prúttum við seljandann um verðið. = We are haggling with the seller over the price.

So in your sentence, only the thing being negotiated is stated: the price.

The normal, neutral order here is:

• Við = subject
• prúttum = verb
• um verðið = prepositional phrase

So it is a straightforward subject–verb–rest sentence:

• Við prúttum um verðið.

But Icelandic is also a verb-second language, so if you move another element to the front for emphasis, the verb still stays in second position:

• Um verðið prúttum við.

That version is more marked and emphatic, but grammatical.

Yes, in other contexts verðið can be a verb form of verða.

But in this sentence it is clearly the noun the price, because it comes after um and fits the expression prútta um verðið.

So here:

• verðið = the price not
• a verb form

Context usually makes this easy to tell apart.