Learn Italian: Prego, signore. - You're welcome, sir.

Prego is a very versatile word! It is the standard response to grazie (thank you), meaning "you're welcome". It comes from the verb pregare (to pray or beg). You can also use it to mean "please" when politely offering something, like gesturing to a chair or holding a door open.

Why is the word signore used here instead of signor?

You use signore when addressing a man directly without using his name, just like saying "sir" in English. You only drop the final -e to make it signor when it is followed by his last name, such as in signor Rossi (Mr. Rossi).

Since we are learning formal address, is there a different informal version of prego?

No, prego is used exactly the same way in both formal and informal situations. In this sentence, the formal tone comes entirely from addressing the person as signore (sir) rather than using their first name.

If I am holding the door for a gentleman, can I also say Prego, signore?

Absolutely! Because prego is a polite word used to invite someone to do something, saying Prego, signore while gesturing toward an open door or an empty chair means "After you, sir" or "Please sit, sir".