PRICE
Price is the consideration given in return for acquiring a good or service. Price is the amount of money paid by the buyer to the seller in exchange for any product and service. The amount charged by the seller for a product is known as its price, which includes cost and the profit margin. It is the return for quality, often expressed by the value, at the marketplace. For example- If you buy a product for Rs 250, then it is the price of that product.
COST
It is basically the aggregate monetary value of the inputs used in the production of the goods or delivery of services. Conversely, Value of a product or service is the utility or worth of the product or service for an individual. Cost is the amount incurred on the inputs like land, labour, capital, enterprise, etc. for producing any product. It is the amount of money spent by the company in the manufacturing of a product. For example- If a company manufactures shoes, then the expenses incurred on raw materials, salaries, rent, interest, taxes, duties, etc. determines the cost of the product.
VALUE
It can be described as the benefit derived by the customer from the product or service. In clearer terms, value is what a customer perceives the product or service is worth to them. Value is the usefulness of any product to a customer. It can never be determined in terms of money and varies from customer to customer. For example- If you are going to a gym by spending 1000 bucks a month, the output seen is worth the expense, then it is the value that you create for a gym, regarding the service being offered there. Here the worth is its value.
| Meaning | Price is the amount paid for acquiring any product or service. | Cost is the amount incurred in producing and maintaining something. | Value is the utility of a
good or service. |
|
| Ascertainment | ||||
| Price is
ascertained from the consumer’s perspective. |
Cost is
ascertained from the |
Value is
ascertained from the user’s perspective. |
||
| producer’s perspective. | ||||
| Estimation | Through Policy | Through Fact | Through Opinion | |
| Impact of variations in market | Prices of product increase or decrease. | Cost of inputs rise or fall. | Value remains unchanged. | |
| Money | It can be
calculated in terms of money. |
It can also be calculated in monetary terms. | It is not
calculated in terms of money. |
|
