Set a rate and stick with it.
Now, my rates are a bit complicated, but they're all clearly spelled out. I charge different rates for different levels and numbers of students, with a premium if I have to drive farther than a certain distance.
My base rate for 6th grade through lower division undergrad is $60/hour for a single student. The same age range for groups is $80 for groups up to four. I don't teach groups greater than 4 students. I charge $75/hour for upper division undergrad and $80/hour for graduate students and test prep. All this assuming I don't have to drive more than 10 miles one way. I charge an additional $5 for each ten miles after that (one way).
There's no room for negotiation. If you want my services, you pay what I'm asking (and I've been told I undercharge anyway...I used to charge more, but my new location doesn't seem to support my old rates, so I dropped them more in line with what I found around here). If you don't like my rates, feel free to shop for somebody cheaper. The free market is a wonderful thing.