Talk:Cost

1st edition, untitled one[edit]

In economics, a cost is a price paid as part of an economic transaction

The trouble with this definition is that "price" doesn't always have anything to do with what economists mean by cost. Your opportunity cost in buying a house, for example, may have little relation to the price of the house. --Ryguasu

Cost versus price[edit]

I removed the definition 'cost is a price' because it is confusing two distinct things (price and cost). Production cost is the value of what has been lost in the form of inputs. It is important to see that the input has not necessarily physically disappeared, but most often the labor would have just gone away. In case of physical goods, some inputs can be recovered if so wished. That is, it would be problematic to define cost as the 'loss' of input incurred to produce something.

But to compute cost, one must see it as the loss of the input in the sense that the same input is not available to produce something else too. This gives a palpable sense of scarcity: cost is a reflection of scarcity.

The good that has been produced is indeed intended to contribute to utility, and the usual idea is that the value of the product is larger than the value of the factors, that value has been added. The idea is that price in reality is larger than cost. New income is created by adding value to a stock of previously existing inputs. If cost is defined as price, then by definition income creation is impossible. Price must be defined as cost-plus-proft to permit the addition of value that goes into income creation.

Neoclassical economics cannot allow the equilibrium price to be larger than marginal cost, because it cannot set up an exchange model properly. The failure of the neoclassical school to understand reality does not mean that reality is wrong; it only means that the neoclassical models are inept to understand market reality. The reality is that the market price is higher than the cost of production. (The buyer incurs further costs to acquire something in addition to paying a price for the good.) Gani 15:14, 28 April 2006 (UTC)[reply]

Cost versus price 2[edit]

The term 'cost' differs for consumers and producers, doesn't it? The price of a good is part of the cost to the consumer (other costs to the consumer in relation to buying the good is travelling to the shop, the opportunity cost of the time he spent in driving to the shop and selecting the good). But, cost to the producer is the manufacturing cost of the good. The price of the good cannot be the cost to the producer (as currently implied in the article -- please check to see if this should be corrected -- see part about private costs and external costs), because it contains in it both the manufacturing cost + profit (profit for value added by transforming raw inputs into a usable good -- a conversion of things in a relatively 'useless' high entropy state to a thing in a 'useful' low entropy state). Correct me if I am wrong. AppleJuggler 10:39, 14 June 2007 (UTC)[reply]

Unit of measure[edit]

Is cost measured in $(₤€¥ etc), $/time or $/unit? These would be quite distinct units of measure, but fundamental to the definition. Of course, that assumes a financial or economic definition. But some sources of confusion may stem from this - somewhere a cost-allocation approach converts the $/hour of direct labour into the $/unit of unit cost.

Trevithj (talk) 03:56, 17 September 2008 (UTC)[reply]

cost —Preceding unsigned comment added by 117.192.11.6 (talk) 12:45, 25 January 2009 (UTC)[reply]

Evidence[edit]

"Cost" is unknowable, immeasurable. With specific aims and specific inputs in mind, one can make reasonable assumptions that some inputs will be given over to meeting that aim. For example, driving to the next town might take a gallon of petrol. That is about the extent of it...a subjective, expected exchange of something for something else. Not particularly useful, but massively overemphasised by the pseudoscience of economic mainstream quackery.

The TOTAL cost of a particular action is unknowable to the agent making the decision. Therefore it is not used as input to the decision. There is no point in hoping that animals are rational agents that operate according to some simplified algorithm involving cost, because even in simple scenarios, such as being faced with 20000 products in a large supermarket, we don't have the computational capacity to make rational cost based choices. Supercomputers do not have the computational ability.

When observing humans, behavioural analysis suffices. It is enough to know that under certain conditions people will be likely to perform an action or unlikely to perform an action. There is no need to make attempts to find and compute 'costs'. 90.179.192.118 (talk) 21:55, 14 September 2009 (UTC).[reply]
Moved to its chronology place, here; ... · — Preceding unsigned comment added by 90.179.192.118 (talk) 22:03, 14 September 2009 (UTC)). ~ by: --Pla y Grande Covián (talk) 12:14, 20 October 2022 (UTC)[reply]

Cost price[edit]

In this AfD I have suggested that cost price could be merged here. Any thoughts on the merits and practicalities of this would be welcome. Curb Safe Charmer (talk) 11:23, 2 April 2024 (UTC)[reply]