Fees are set as a "flat rate" per transaction, but normally expressed as a fraction of "price over size"

So if a fee is 150 "sat/byte" or satoshi's per byte. A satoshi is 0.00000001 of a bitcoin.

So if your transaction is 250 bytes (which is average for a single transaction to a single person), then you will pay (250 * 150) satoshis (37500 sat), which is about $5.

If your transaction is larger, you'll pay more, if it's smaller, you'll pay less.

But they are "ranked" in terms of who is picked first by "sat/byte" since the amount of room in the block is only 1MB.

So a 500 byte transaction with 37500 sats in fees is worth less than a 250 byte transaction with 37500 sats in fees, because the 500 byte transaction takes up more room that other higher paying transactions could fit in.

Thanks for the explanation. Why do transactions vary so much in relative size?

A transaction can have many inputs and many outputs. These are all Bitcoin addresses.

Sally and Bob each have 1 Bitcoin. Sally received her bitcoin to a single address. If Sally wants to send that 1 Bitcoin to Charlie, that transaction would have 1 input (the address she received it on) and one output (the address Charlie wants to receive it to). Bob has 1 Bitcoin total, but his 1 Bitcoin came from 4 x 0.25 transactions. Bob didn't want to reuse addresses, so for him to send 1 Bitcoin to Charlie he has a transaction with 4 inputs (each address which contains 0.25 BTC) and 1 output. Thus, Bob's transaction is much bigger than Alice's, despite the same amount of Bitcoin being sent.

Thanks, that makes a lot of sense now.