“Cost” vs. “Price”: What’s the Difference?
May 28, 2023
Engram
The difference between “cost” and “price”
- Cost is usually associated with the expense involved in making a product or service, while price is usually the amount the consumer pays for that product or service.
- Cost can mean the expense involved in making a good or the amount the consumer pays for the good, but price only means the amount the consumer pays.
- Both cost and price can be figurative and can be interchangeable in some contexts, but price cannot mean the expenses of making a good unless referring to the price of the raw materials.
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What is the definition of “cost” and “price”?
Cost
- The cost refers to the amount of money required to produce or obtain a product or service.
- It can include all the expenses involved in the production process, such as materials, labor, and overhead costs.
- Input costs do not necessarily determine the final selling price of a product or service.
Price
- Price refers to the amount of money that a customer pays to purchase a product or service.
- It is usually determined by the seller and is influenced by factors such as demand and competition.
- Price reflects the perceived value of a product or service and can vary based on the target market.
Which is the more popular variant on the Internet?
“Cost” is the more popular variant on the web.
More popular
Cost
4,960,000,000 results on the web
Examples
- The company increased prices because manufacturing costs rose.
- The cost of living in this city is very high.
- We need to reduce production costs to increase profits.
Price
2,820,000,000 results on the web
Examples
- The price of this new smartphone is too high for me.
- I bought this jacket at a discounted price during the sale.
- The price of oil has risen sharply in the last few months.
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