![]() In simple terms, cost implies the financial worth of the sacrifice made, to obtain the goods or services. It can be anything which adds to the expense of product or service manufactured or supplied by the firm. with an aim of producing the product or supplying the services. The cost can be defined as the total amount spent on the inputs like land, labour, capital, machinery, material, etc. The price element differs from the other three elements in the sense that it is the price which generates revenue, while the other three adds to the cost of production. ![]() Salary: For the work done in an organization.įurther, it is one of the four P’s of the marketing mix, the other being product, place (distribution) and promotion.Rent: For the use of place or machinery. Another word for variable costs professional#Fees: For the supply of professional services.when the subject matter of the commercial transaction is a good it is called as ‘price’, but when the subject matter is a ‘service’, it can be known as: It must be noted that it is referred by different names when used in different contexts, i.e. It is the return for quality, often expressed by the value, at the marketplace. In a commercial transaction, price refers to the amount charged by the seller from the buyer, in exchange for any product or service, which includes cost and profit. Price is the consideration given in return for acquiring a good or service. Value is ascertained from the consumer's perspective. Price is ascertained from the customer's or marketer's perspective.Ĭost is ascertained from the producer's perspective. Value is the utility of a good or service for a customer. Price is the amount paid for acquiring any product or service.Ĭost is the amount incurred in producing and maintaining the product. In this piece of writing, you will get to know the differences between price, cost and value. You might have noticed that at the time of shopping, the first thing that we usually check in a product or service is – what is its price? And we also try to estimate – how much does it cost? But before taking the buying decision, all that matters for a person is – what is its value? In a marketplace, you can find a range of products, offered for sale by different marketers, which differ in their size, shape, quality, performance, type, etc. ![]() Conversely, Value of a product or service is the utility or worth of the product or service for an individual. ![]() Cost is basically the aggregate monetary value of the inputs used in the production of the goods or delivery of services. ![]()
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