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Definition

In ordinary usage, price is the quantity of payment or compensation for something. People may say about a criminal that he has 'paid the price to society' to imply that he has paid a penalty or compensation. They may say that somebody has 'paid for his folly' to imply that he suffered the consequences of his actions.

Economists view price as an exchange ratio between goods that are exchanged for each other. In the case of barter of two goods in the quantities x and y, the price of a unit of the first good is the ratio y/x, while the price of a unit of the second good is the ratio x/y.

This however has not been used consistently, so that old confusion regarding value frequently reappears. The value of something is a quantity counted in common units of value called numeraire, which may even be an imaginary good. This is done to compare different goods. The unit of value is frequently confused with price, because market value is calculated as the quantity of some good multiplied by its nominal price.

Theory of price asserts that the market price reflects interaction between two opposing considerations. On the one side are demand considerations based on marginal utility, while on the other side are supply considerations based on marginal cost. An equilibrium price is supposed to be at once equal to marginal utility (counted in units of income) from the buyer's side and marginal cost from the seller's side. Though this view is accepted by almost every economist, and it constitutes the core of mainstream economics, it has recently been challenged seriously.

There was time when people debated use-value versus exchange value, often wondering about the paradox of value (diamond-water paradox). The use-value was supposed to give some measure of usefulness, later refined as marginal benefit (which is marginal utility counted in common units of value) while exchange value was the measure of how much one good was in terms of another, namely what is now called relative price.

Relative and nominal price

The difference between nominal price and relative or real price (as exchange ratio) is often made. Nominal price is the price quoted in money while relative or real price is the exchange ratio between real goods regardless of money. The distinction is made to make sense of inflation. When all prices are quoted in terms of money units, and the prices in money units change more or less proportionately, the ratio of exchange may not change much. In the extreme case, if all prices quoted in money change in the same proportion, the relative price remains the same.

It is now becoming clear that the distinction is not useful and indeed hides a major confusion. The conventional wisdom is that proportional change in all nominal prices does not affect real price, and hence should not affect either demand or supply and therefore also should not affect output. The new criticism is that the crucial question is why is there more money to pay for the same old real output. If this question is answered, it will show that dynamically, even as the real price remains exactly the same, output in real terms can change, just because additional money allow additional output to be traded. The supply curve can shift such that at the old price, the new higher output is sold. This shift if not possible without additional money.

From this point of view, a price is similar to an opportunity cost, that is, what must be given up in exchange for the good or service that is being purchased. For example, if x=1 and y=2, the relative price of x in terms of y is 2, and the price of y in terms of x is 0.5.

The price of an item is also called the price point, especially where it refers to stores that set a limited number of price points. For example, Dollar General is a general store or "five and dime" store that sets price points only at even amounts, such as exactly one, two, three, five, or ten dollars (among others). Other stores (such as dollar stores, pound stores, euro stores, 100-yen stores, and so forth) only have a single price point ($1, £1, 1€, ¥100), though in some cases this price may purchase more than one of some very small items.Price is relatively less than the cost price.Loss always be there when the cost price is higher than the selling price.

Austrian theory

The last objection is also sometimes interpreted as the paradox of value, which was observed by classical economists. Adam Smith described what is now called the Diamond – Water Paradox: diamonds command a higher price than water, yet water is essential for life, while diamonds are merely ornamentation. One solution offered to this paradox is through the theory of marginal utility proposed by Carl Menger, the father of the Austrian School of economics.

As William Barber put it, human volition, the human subject, was "brought to the centre of the stage" by marginalist economics, as a bargaining tool. Neoclassical economists sought to clarify choices open to producers and consumers in market situations, and thus "fears that cleavages in the economic structure might be unbridgeable could be suppressed".

Without denying the applicability of the Austrian theory of value as subjective only, within certain contexts of price behavior, the Polish economist Oskar Lange felt it was necessary to attempt a serious integration of the insights of classical political economy with neo-classical economics. This would then result in a much more realistic theory of price and of real behavior in response to prices. Marginalist theory lacked anything like a theory of the social framework of real market functioning, and criticism sparked off by the capital controversy initiated by Piero Sraffa revealed that most of the foundational tenets of the marginalist theory of value either reduced to tautologies, or that the theory was true only if counter-factual conditions applied.

One insight often ignored in the debates about price theory is something that businessmen are keenly aware of: in different markets, prices may not function according to the same principles except in some very abstract (and therefore not very useful) sense. From the classical political economists to Michal Kalecki it was known that prices for industrial goods behaved differently from prices for agricultural goods, but this idea could be extended further to other broad classes of goods and services.

Price as productive human labour time

Marxists assert that value derives from the volume of socially necessary abstract labour time exerted in the creation of an object. This value does not relate to price in a simple manner, and the difficulty of the conversion of the mass of values into the actual prices is known as the transformation problem. However, many recent Marxists deny that any problem exists. Marx was not concerned with proving that prices derive from values. In fact, he admonished the other classical political economists (like Ricardo and Smith) for trying to make this proof. Rather, for Marx, price equal the cost of production (capital-cost and labor-costs) plus the average rate of profit. So if the average rate of profit (return on capital investment) is 22% then prices would reflect cost-of-production plus 22%. The perception that there is a transformation problem in Marx stems from the injection of Walrasian equilibrium theory into Marxism where there is no such thing as equilibrium.[citation needed]

Confusion between prices and costs of production

Price is commonly confused with the notion of cost of production as in “I paid a high cost for buying my new plasma television”. Technically, though, these are different concepts. Price is what a buyer pays to acquire products from a seller. Cost of production concerns the seller’s investment (e.g., manufacturing expense) in the product being exchanged with a buyer. For marketing organizations seeking to make a profit the hope is that price will exceed cost of production so the organization can see financial gain from the transaction. Finally, while pricing is a topic central to a company's profitability, pricing decisions are not limited to for-profit companies. Non-profit organizations, such as charities, educational institutions and industry trade groups, also set prices, though this is often not as apparent. For instance, charities seeking to raise money may set different “target” levels for donations that reward donors with increases in status (e.g., name in newsletter), gifts or other benefits. While a charitable organization may not call it a price in their promotional material, in reality these targets are prices since they specify a cost that must be paid by buyers (donors) in order to obtain something of value.

See also

References

  • Milton Friedman, Price Theory.
  • George Stigler, Theory of Price.
  • Simon Clarke, Marx, marginalism, and modern sociology: from Adam Smith to Max Weber (London: The Macmillan Press, Ltd, 1982).
  • Makoto Itoh & Costas Lapavitsas, Political Economy of Money and Finance.
  • Pierre Vilar, A history of gold and money.

External links

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Travel guide

Up to date as of January 14, 2010

From Wikitravel

Price[1] is a mid-sized town (pop. 9,000) in Northeastern Utah. To the south and east lie the terrifically remote expanses of desert of the San Rafael Swell and Colorado Plateau. Nearby are a few areas of interest.

Get in

Drive southeast from Spanish Fork through Spanish Fork Canyon, over Soldiers Summit, and through Price Canyon, and also coming northwest from an I-70/Hwy 6 junction near Green River UT all on Highway 6. It can be accessed from I-70 through Emery County on Highway 10 from the south. There is also an Amtrak station in Helper, which is a city just north of Price.

Get around

Driving, and walking are almost the only ways to go in Price. Due to its size, nearly everything in the city is available to you within walking distance, but some features of the area are best driven to.

See

To the northeast Nine Mile Canyon features some of the best ancient rock art in the state. Further east the Green River carves canyons through the desert offering some whitewater rafting opportunities. South lies the northern portion of the San Rafael Swell with some wonderful scenic drives and backcountry hiking opportunities for the adventurous. To the west are the forested highlands of the Wasatch Plateau offering some pleasant scenic drives, hiking and mountain biking opportunities in a cool alpine setting. Price and surrounding areas was once the playground of the dinosaurs. Today it's a playground for dinosaur enthusiasts! Only here will you see the actual dinosaurs in the area where they were found. Plus, area museums have new species that are not on exhibit anywhere else in the world.

  • Visit CEU's Prehistoric Museum[2]
  • Carbon County Club Golf Course - the granddaddy of Castle Country's golf courses. Natural sandstone bluffs and shale cliffs surround an 18-hole championship golf course. The Price River runs through the front nine holes. The back nine features a waterfall and hidden Indian rock art above the 18th fairway. The Carbon Country Club greens are very well maintained. A pro shop with a snack bar and a fine restaurant make the golfing experience complete. Phone 435-637-2388 for golfing times and information.
  • Green River State Park Golf Course - Open year round, located in heart of Green River City, Utah. Within the beautiful Green River State Park, this nine-hole course winds through the cottonwood trees and a long the Green River. The professionally designed sand traps, water hazards and well-defined fairways mingle beautifully with natural splendor of the desert landscape. For more information and tee-times call (435) 564-8882.
  • Hiking
  • Biking
  • Camping
  • Boating
  • Fishing
  • Hunting
  • River Trips
  • Horseback Riding
  • Climbing or Canyoneering
  • Cross Country Skiing
  • Snowmobiling
  • Backpacking

Eat

Price is an ethnically diverse area for dining offering Greek, Italian, Chinese, Mexican, Dutch Oven dinners, steak houses and many other venues in addition to a brewery where they serve a variety of specialty beers as well as great food! A nice choice of fast food restaurants is also available.

Sleep

There are a variety of accommodations to choose from ranging from indoor pools, spas, pet friendly accommodations, exercise rooms, restaurants, shopping, walking trails, refrigerators and microwaves in every room, continental breakfast and hot tubs. You can find whatever you are looking for at a price that fits your budget!

•Best Western Carriage House Inn, 590 E Main Street, 1-435-637-5660, Fax: 1-435-637-5157
•Holiday Inn Hotel & Suites, 838 Westwood Blvd, 1-435-637-8880
•Greenwell Inn, 655 East Main Street, 1-435-637-3520, Fax: 1-435-637-4858
•National 9 Inn, 641 Price River Drive. 1-435-637-7000, Fax: 1-435-637-8889
•Super 8 Motel, 180 North Hospital Drive, 1-435-637-8088, Fax: 1-435-637-8483


Source material

Up to date as of January 22, 2010
(Redirected to The Price article)

From Wikisource

The Price
by Clark Ashton Smith
1912.

Behind each thing a shadow lies;
Beauty hath ever its cost:
Within the moonlight-flooded skies
How many stars are lost!

PD-icon.svg This work is in the public domain in the United States because it was published before January 1, 1923. It may be copyrighted outside the U.S. (see Help:Public domain). Flag of the United States.svg

1911 encyclopedia

Up to date as of January 14, 2010
(Redirected to Database error article)

From LoveToKnow 1911

(There is currently no text in this page)


Wiktionary

Up to date as of January 15, 2010

Definition from Wiktionary, a free dictionary

See also price

English

Proper noun

Singular
Price

Plural
-

Price

  1. A Welsh patronymic surname, anglicized from ap Rhys.

See also


Simple English

There are different definitions of price. Perhaps the simplest definition is to say that the price is the value, of a good or service, expressed in another good or service.

Let's say Peter raises sheep. Sally raises ducks. Winter is coming, so Sally wants some sheepskin coat to make her feel warm. She could now first calculate how much sheepskin she would need for a coat. Lets say she needs 2 sheep skins for that coat. She would then go to Peter and ask him how much he wants for the two sheep skins she needs. Peter would then likely tell a price. Alternatively Sally could trade some of her ducks for the sheepskins.

Since trading ducks for sheep is rather complicated, people introduced something they called money. This is simply used for trading. So sally would trade some of her ducks for money. Some of this money she could then give to Peter to get the sheepskin.



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