2. Value Determines Price And Costs Are A Choice - Deepstash

2. Value Determines Price And Costs Are A Choice

With value being in the eyes (and experience) of the consumer, the price they are asked to pay must be (much) lower. The entrepreneur’s job is to figure out at what price their product is attractive, and then choose a cost structure that allows for profit. In other words, the price is a guess based on what value consumers see in the product. The only choice is cost: how to produce at costs below the selling price and, ultimately, whether to produce.

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xarikleia

“An idea is something that won’t work unless you do.” - Thomas A. Edison

Modern economics is a theory of the economy that leaves no place for the entrepreneur. So where should entrepreneurs turn to improve their understanding? The Austrian school of economics might be the answer.

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High Value at a Low Price

High Value at a Low Price

  • Price = what you pay.
  • Value = what you get.

You lose money when the price you pay does not match the value you're getting. For example, when you're paying high interest on credit card debt or spending on stuff you hardly use.

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