Difference Wiki

Cost vs. Price: What's the Difference?

Edited by Sumera Saeed || By Sawaira Riaz || Published on November 29, 2023
Cost refers to the expenditure involved in making a product, while price is the amount a consumer pays for it.

Key Differences

When discussing financial transactions, the terms "cost" and "price" have distinct meanings. Cost pertains to the amount of money, time, or resources expended to produce or acquire something. It is the investment made by businesses to bring a product or service to the market.
Sawaira Riaz
Nov 29, 2023
On the other hand, price is the monetary value at which a product or service is offered for sale to customers. It's the amount that consumers are expected to pay in exchange for the item or service. Price often includes not only the cost but also a profit margin.
Sawaira Riaz
Nov 29, 2023
To put it in practical terms, imagine a company manufacturing a shirt. The cost involves the expenses for materials, labor, and overheads. This cost represents the minimum amount the company would need to cover to break even.
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Nov 29, 2023
Conversely, the price is what you, as a consumer, pay when you purchase that shirt from a store. This price will typically be higher than the cost, as it includes the retailer's markup, which accounts for their profit, overheads, and other factors. Thus, while cost and price are interconnected, they denote different financial concepts.
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Nov 29, 2023

Comparison Chart

Definition

Expenditure to produce/acquire an item
Amount paid by the consumer for an item
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Perspective

Producer's/Manufacturer's
Consumer's/Buyer's
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Components

Materials, labor, overheads, etc.
Cost + Profit + Taxes + Other charges
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Purpose

Determines break-even point
Generates revenue and profit
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Flexibility

Often fixed but can vary based on efficiencies
Can be adjusted based on market demand and strategy
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Cost and Price Definitions

Cost

The expenditure incurred to produce an item.
The cost of producing the book included printing and binding expenses.
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Oct 28, 2023
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Price

The sum of money expected, required, or given.
The antique's price was non-negotiable.
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Oct 28, 2023

Cost

The amount paid to acquire resources.
The cost of the machinery was $10,000.
Aimie Carlson
Oct 28, 2023

Price

The amount charged for a product or service.
The price of the dress is $50.
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Oct 28, 2023

Cost

The sacrifice made to achieve something.
The cost of success often involves long hours and dedication.
Sara Rehman
Oct 28, 2023

Price

A measure of what is given up in exchange for something.
The price of freedom is eternal vigilance.
Aimie Carlson
Oct 28, 2023

Cost

A measure of the effort or loss involved.
The environmental cost of deforestation is significant.
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Oct 28, 2023

Price

The amount as of money or goods, asked for or given in exchange for something else.
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Oct 13, 2023

Cost

An amount paid or required in payment for a purchase; a price.
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Oct 13, 2023

Price

The cost at which something is obtained
Believes that the price of success is hard work.
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Oct 13, 2023

Cost

The expenditure of something, such as time or labor, necessary for the attainment of a goal
"Freedom to advocate unpopular causes does not require that such advocacy be without cost" (Milton Friedman).
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Oct 13, 2023

Price

The cost of bribing someone
Maintained that every person has a price.
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Oct 13, 2023

Cost

Costs(Law) Charges incurred in bringing litigation, including court fees and charges that may be payable by the losing party, but usually not including attorneys' fees.
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Oct 13, 2023

Price

A reward offered for the capture or killing of a person
A felon with a price on his head.
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Oct 13, 2023

Cost

To require a specified payment, expenditure, effort, or loss
It costs more to live in the city.
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Oct 13, 2023

Price

(Archaic) Value or worth.
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Cost

To have as a price.
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Oct 13, 2023

Price

To fix or establish a price for
Shoes that are priced at sixty dollars.
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Oct 13, 2023

Cost

To cause to lose, suffer, or sacrifice
Participating in the strike cost me my job.
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Oct 13, 2023

Price

To find out the price of
Spent the day pricing dresses.
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Oct 13, 2023

Cost

Past tense and past participle costed To estimate or determine the cost of
The accountants costed out our expenses.
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Oct 13, 2023

Price

The cost required to gain possession of something.
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Oct 13, 2023

Cost

To incur a charge of; to require payment of a (specified) price.
This shirt cost $50, while this was cheaper at only $30.
It will cost you a lot of money to take a trip around the world.
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Oct 13, 2023

Price

The cost of an action or deed.
I paid a high price for my folly.
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Oct 13, 2023

Cost

To cause something to be lost; to cause the expenditure or relinquishment of.
Trying to rescue the man from the burning building cost them their lives.
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Oct 13, 2023

Price

Value; estimation; excellence; worth.
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Oct 13, 2023

Cost

To require to be borne or suffered; to cause.
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Price

(transitive) To determine the monetary value of (an item); to put a price on.
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Oct 13, 2023

Cost

To calculate or estimate a price.
I'd cost the repair work at a few thousand.
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Oct 13, 2023

Price

To pay the price of; to make reparation for.
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Oct 13, 2023

Cost

Amount of money, time, etc. that is required or used.
The total cost of the new complex was an estimated $1.5 million.
We have to cut costs if we want to avoid bankruptcy.
The average cost of a new house is twice as much as it was 20 years ago.
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Oct 13, 2023

Price

To set a price on; to value; to prize.
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Oct 13, 2023

Cost

A negative consequence or loss that occurs or is required to occur.
Spending all your time working may earn you a lot of money at the cost of your health.
The army won the battle decisively, but at a cost of many lives.
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Oct 13, 2023

Price

To ask the price of.
To price eggs
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Cost

(obsolete) Manner; way; means; available course; contrivance.en
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Oct 13, 2023

Price

The sum or amount of money at which a thing is valued, or the value which a seller sets on his goods in market; that for which something is bought or sold, or offered for sale; equivalent in money or other means of exchange; current value or rate paid or demanded in market or in barter; cost.
We can afford no more at such a price.
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Oct 13, 2023

Cost

Quality; condition; property; value; worth; a wont or habit; disposition; nature; kind; characteristic.
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Price

Value; estimation; excellence; worth.
Her price is far above rubies.
New treasures still, of countless price.
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Oct 13, 2023

Cost

(obsolete) A rib; a side.
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Oct 13, 2023

Price

Reward; recompense; as, the price of industry.
'T is the price of toil,The knave deserves it when he tills the soil.
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Oct 13, 2023

Cost

(heraldry) A cottise.
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Oct 13, 2023

Price

To pay the price of.
With thine own blood to price his blood.
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Oct 13, 2023

Cost

A rib; a side; a region or coast.
Betwixt the costs of a ship.
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Price

To set a price on; to value. See Prize.
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Oct 13, 2023

Cost

See Cottise.
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Oct 13, 2023

Price

To ask the price of; as, to price eggs.
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Oct 13, 2023

Cost

The amount paid, charged, or engaged to be paid, for anything bought or taken in barter; charge; expense; hence, whatever, as labor, self-denial, suffering, etc., is requisite to secure benefit.
One day shall crown the alliance on 't so please you,Here at my house, and at my proper cost.
At less cost of life than is often expended in a skirmish, [Charles V.] saved Europe from invasion.
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Oct 13, 2023

Price

The amount of money needed to purchase something;
The price of gasoline
He got his new car on excellent terms
How much is the damage?
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Oct 13, 2023

Cost

Loss of any kind; detriment; pain; suffering.
I know thy trains,Though dearly to my cost, thy gins and toils.
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Oct 13, 2023

Price

The property of having material worth (often indicated by the amount of money something would bring if sold);
The fluctuating monetary value of gold and silver
He puts a high price on his services
He couldn't calculate the cost of the collection
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Oct 13, 2023

Cost

Expenses incurred in litigation.
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Oct 13, 2023

Price

Value measured by what must be given or done or undergone to obtain something;
The cost in human life was enormous
The price of success is hard work
What price glory?
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Oct 13, 2023

Cost

To require to be given, expended, or laid out therefor, as in barter, purchase, acquisition, etc.; to cause the cost, expenditure, relinquishment, or loss of; as, the ticket cost a dollar; the effort cost his life.
A diamond gone, cost me two thousand ducats.
Though it cost me ten nights' watchings.
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Oct 13, 2023

Price

The high value or worth of something;
Her price is far above rubies
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Oct 13, 2023

Cost

To require to be borne or suffered; to cause.
To do him wanton rites, which cost them woe.
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Oct 13, 2023

Price

A reward for helping to catch a criminal;
The cattle thief has a price on his head
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Oct 13, 2023

Cost

The total spent for goods or services including money and time and labor
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Oct 13, 2023

Price

Cost of bribing someone;
They say that every politician has a price
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Oct 13, 2023

Cost

The property of having material worth (often indicated by the amount of money something would bring if sold);
The fluctuating monetary value of gold and silver
He puts a high price on his services
He couldn't calculate the cost of the collection
Sawaira Riaz
Oct 13, 2023

Price

United States operatic soprano (born 1927)
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Cost

Value measured by what must be given or done or undergone to obtain something;
The cost in human life was enormous
The price of success is hard work
What price glory?
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Oct 13, 2023

Price

Determine the price of;
The grocer priced his wares high
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Oct 13, 2023

Cost

Be priced at;
These shoes cost $100
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Price

Ascertain or learn the price of;
Have you priced personal computers lately?
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Cost

Require to lose, suffer, or sacrifice;
This mistake cost him his job
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Price

The monetary value attached to something.
The price of gold fluctuates daily.
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Oct 28, 2023

Cost

The economic value of resources used.
The project's cost exceeded its budget.
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Oct 28, 2023

Price

The rate or tariff set for services.
The price for the consultant's input was steep.
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Oct 28, 2023

FAQs

Why might a company absorb additional costs without raising prices?

To maintain competitiveness, customer loyalty, or market share.
Aimie Carlson
Nov 29, 2023

Can the price be lower than the cost?

Yes, sometimes items are sold at a loss to clear stock or gain market share.
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Nov 29, 2023

What factors contribute to the cost of a product?

Materials, labor, overheads, and sometimes marketing and R&D contribute to the cost.
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Nov 29, 2023

Why do some brands have similar costs but different prices?

Brand value, positioning, perceived quality, and marketing can influence price.
Janet White
Nov 29, 2023

How is the price of an item determined?

Price is based on cost, profit margin, market demand, competition, and other factors.
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Nov 29, 2023

Can economies of scale reduce cost?

Yes, producing in larger quantities often reduces the per-unit cost.
Sara Rehman
Nov 29, 2023

What's the difference between selling price and cost price?

Cost price is the expenditure to produce/buy, while selling price is what customers pay.
Sawaira Riaz
Nov 29, 2023

Is cost always monetary?

No, cost can also refer to time, effort, or other sacrifices.
Sara Rehman
Nov 29, 2023

How do discounts affect the price?

Discounts reduce the final price a consumer pays.
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Nov 29, 2023

How does inflation impact cost and price?

Inflation can increase both the cost of production and the final price to consumers.
Aimie Carlson
Nov 29, 2023

Can a product's cost change over time?

Yes, due to factors like resource scarcity, technology, or efficiency improvements.
Sara Rehman
Nov 29, 2023

What is 'price elasticity'?

It's a measure of how demand changes in response to a change in price.
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Nov 29, 2023

Why might two stores have different prices for the same product?

Location, overheads, target market, and competitive strategies can affect price.
Aimie Carlson
Nov 29, 2023

What is the "opportunity cost"?

It's the value of the next best alternative foregone when making a decision.
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Nov 29, 2023

Is the price always a reflection of quality?

Not always; price can be influenced by branding, marketing, and other non-quality factors.
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Nov 29, 2023

What's the difference between fixed and variable costs?

Fixed costs remain constant regardless of production, while variable costs change with output.
Harlon Moss
Nov 29, 2023

How is "marginal cost" different from "total cost"?

Marginal cost is the cost of producing one additional unit, while total cost is the entire expenditure for all units.
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Nov 29, 2023

How do taxes influence the price?

Taxes can increase the final price if passed on to consumers.
Sara Rehman
Nov 29, 2023

How do sales promotions affect price?

Sales promotions often temporarily reduce the price to boost sales.
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Nov 29, 2023

Why might a company price a new product very low?

To penetrate the market, gain customers, or outcompete rivals, even if it doesn't cover the cost initially.
Sawaira Riaz
Nov 29, 2023
About Author
Written by
Sawaira Riaz
Sawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.
Edited by
Sumera Saeed
Sumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.

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