price vs cost
Share
1,111,111 TRP = 11,111 USD
1,111,111 TRP = 11,111 USD
1,111,111 TRP = 11,111 USD
Reset Your New Password Now!
Lost your password? Please enter your email address. You will receive a link and will create a new password via email.
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this memory should be reported.
Please briefly explain why you feel this user should be reported.
Price is the amount a customer pays to acquire a product or service, set by sellers based on market demand, competition, and perceived value. It’s external-facing and directly impacts revenue. For example, a phone’s price is $1,000.
Cost refers to the expenses incurred to produce or deliver the product/service, including materials, labor, and overhead. It’s internal and affects profitability. If producing that phone costs $600, the profit margin is $400.
Key Differences:
Perspective: Price is customer-centric; cost is seller-centric.
Flexibility: Prices fluctuate with market conditions; costs are relatively stable (unless production changes).
Purpose: Price drives sales; cost determines feasibility.
Example:
A bakery sells a cake for $20 (price) but spends $8 on ingredients and labor (cost). The $12 difference is gross profit.
Nuance: While price is visible, hidden costs (e.g., marketing, storage) influence pricing strategies. Businesses aim to balance both—covering costs while staying competitively priced.
In short:
Price = What you pay.
Cost = What the seller spends.