Price vs. Cost: Yes, they’re different!
When to differentiate between these words
What to KnowIn business terms, price is the amount of money a customer pays for something and cost is the amount of money it takes to produce something: “The company makes a profit when the cost of an item is less than the price they charge a customer.” But in actual usage, cost and price are often used in the same way: “What is the cost/price of this book?”
Cost vs. Price
In business terms, price is the amount of money a customer pays for something.
The price of the book is $16.
House prices are rising in the area.
Cost is the amount of money it takes to produce something.
The company tries to keep costs down.
Both materials and labor are included in the cost of production.
But in common usage, cost and price are often used in the same way.
The cost/price of a kitchen renovation is not in our budget.
What is the cost/price per meal when you cook at home?
Cost and price also have similar figurative uses that suggest effort, loss, or sacrifice in exchange for something.
the price of freedom
taking risks, but at what cost?
The ultimate cost was his life.
They paid the price for their bad decision.
Learn more financial terms.
