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Date: 2019-07-17 Page is: DBtxt001.php list0300-Price-1

Definitions for TrueValueMetrics
Price

Price is what a buyer pays for some good or service. It is what the customer pays at the supermarket or drug store. Price is what is being paid for the item ... price is the money received when an item is sold.

For a buyer, the price is a cost ... something of a conundrum that confuses analysis!

Understanding price ought to be simple ... but is not. The price is usually framed in a way that makes comparison between different products as difficult as possible. This is no accident ... it is designed to confuse the customer and mis-inform as much as possible. Making comparison difficult is a standard practice in marketing.

There are also prices all the way along the value or distribution chain from factory gate to final retail sale. This chain sometimes involves changes in ownership, in which case there are prices that are reflected on invoices ... but the distribution chain may be under single ownership in which case there is no inter-organization price, merely a transfer price as the items moves along the distribution chain.

Price is also associated with the problem of affordability. People who need something may be poor and not have enough money to pay the price that the supplier can demand. This is a key issue in public policy for health, education and a number of other essential services needed by a progressing society such as water and sanitation.

And price may be value ... but usually is not. The price is merely what an item is traded at ... and may or may not have anything to do with value. Many factors influence price ... and where price is determined by market forces, there are many factor that influence the behavior of prices in a market.

Prices in the financial markets

Stock Price

Bond price

Commodity Price

More than just supply and demand



The text being discussed is available at


TrueValueMetrics (TVM) is an Open Source / Open Knowledge initiative.
It has been funded by family and friends plus donations from well wishers who understand
the importance of accountability and getting the management metrics right.
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