This settings form only appears when you have enabled the Attribute module.
Attributes are created and attached to products to let customers choose from a list of options that affect the product they're purchasing. For example, a t-shirt may have the attribute of size with options for small, medium, large, etc. Attributes may affect the price, weight, and model number of the product when added to the cart. This settings form lets you specify how to display the price alterations on the product pages.
By default, the price change is displayed by each option name in the select box. This may be changed so prices are not displayed at all or displayed as a total price instead of just the modification.
Further attribute configuration should take place through the Manage attributes section of the Products administration menu. Read more about this here.