Question

1. Define price and value and explain the similarities and differences between the two
2. What is the law of demand and what are two reasons why it’s valid?

Answer 1

Price and value

Value implies the unity of worth of commodity of services for an individual. Whereas price can be understood as the money or amount to be paid in order to get something. Value is is the the utility of a good or services.whereas price is the amount paid for acquiring any product or service. Value is is ascertained from the user's perspective whereas price is ascertained from the consumer's prospective. Value remain unchanged during impact of variations in market whereas price of product increase or decrease. Value is not calculated in term of money e whereas price can be calculated in terms of money.

water is essential for us to survive Still it is of low price, wild diamonds are just used for ornamentation and nobody dies without it, is is priced very high. Reason behind it value as the value of water is much for us it is available at a low price while the value of diamond is less for us therefore it is very high price. Price is the amount you pay whereas value is what the product or service pays you.

Price does not affect the value:- when you decide how much you are ready to pay for something you didn't care how much you are asked to pay for it.first you decide how much you are willing to pay and then you look at the price to see if you want to buy. Value and price are not dependent on capability. People buy things if value is higher than price. Value is different for different people.