Kaupandinn prúttar þannig að verðlækkunin verður meiri.

The ending -inn is the suffixed definite article, so kaupandinn means the buyer rather than just a buyer or buyer.

• kaupandi = buyer
• kaupandinn = the buyer

In this sentence, kaupandinn is the subject of the main clause, and it is in the nominative singular.

Kaupandi is a noun meaning buyer. It is built from the verb kaupa (to buy) plus the ending -andi, which often forms a person connected with an action.

So:

• kaupa = to buy
• kaupandi = buyer, someone who buys

Even though the ending -andi can look verb-like to learners, here it functions as an ordinary noun.

Prúttar is the 3rd person singular present tense of prútta.

• að prútta = to haggle, bargain
• hann/hún prúttar = he/she haggles
• kaupandinn prúttar = the buyer haggles

It is singular because the subject kaupandinn is singular.

No, prútta does not have to take a direct object. It can be used on its own, meaning to haggle / bargain over the price in a general sense.

If you want to be more specific, Icelandic often adds prepositional phrases, for example:

• prútta við seljandann = haggle with the seller
• prútta um verðið = haggle about the price

In your sentence, the important point is simply that the buyer is haggling, and the result is explained in the next clause.

Þannig að is a very common expression meaning so that, with the result that, or sometimes simply so in everyday English.

Here it introduces the consequence of the haggling:

• the buyer haggles,
• so that / with the result that the price reduction becomes greater.

It is best learned as one unit in sentences like this.

No. This að is not the infinitive marker.

In Icelandic, að can do more than one job:

• infinitive marker: að lesa = to read
• conjunction: þannig að verðlækkunin verður meiri = so that the price reduction becomes greater

Here að is a conjunction introducing a whole clause, so you need a normal finite verb: verður.

Verðlækkunin means the price reduction.

It is made up of:

• verð = price
• lækkun = lowering, reduction
• verðlækkun = price reduction
• verðlækkunin = the price reduction

The ending -in is the suffixed definite article here. The noun verðlækkun is feminine, and in the nominative singular definite form it becomes verðlækkunin.

In this clause, verðlækkunin is the subject of verður meiri.

Verður meiri means becomes greater or ends up greater, so it highlights a change or result.

• er meiri = is greater
• verður meiri = becomes greater

Because the first clause describes an action by the buyer, the second clause naturally expresses the result of that action: the reduction becomes bigger.

So verður is a very natural choice here.

Meiri is the comparative form of mikill, which can mean big, great, or much, depending on context.

Here meiri means greater / larger in the sense of extent or amount:

• mikill = big, much
• meiri = bigger, greater, more

It agrees with verðlækkunin. Since verðlækkunin is feminine singular nominative, meiri is the correct form.

A useful point: in the comparative, masculine and feminine nominative singular are both often meiri, while the neuter form is meira.

Because after þannig að, you get a subordinate clause, and subordinate clauses in Icelandic normally do not use main-clause V2 word order.

So the normal order is:

• að + subject + verb + complement
• að verðlækkunin verður meiri

This is different from the main clause:

• Kaupandinn prúttar

So the sentence has:

• main clause: Kaupandinn prúttar
• subordinate result clause: þannig að verðlækkunin verður meiri

In this sentence, it is mainly about result.

That is, the buyer haggles, and the consequence is that the reduction is greater. In English, so that can sometimes sound like purpose, but here the Icelandic sentence is most naturally understood as with the result that.

So the emphasis is not necessarily the buyer haggles in order to..., but rather the buyer haggles, and this leads to...