Which of the following describes the economic meanings of cost and price?
A) Cost is exchange worth, and price is dollar worth.
B) Cost is what must be given up to produce a good, and price is what a seller receives when the good is sold.
C) They are the same, and they both mean what is received when a good is sold.
D) Cost refers to what the buyers pay for the good, and price refers to what sellers receive when the good is sold.
E) Cost refers to the price that buyers must pay to buy the good.

Question

Quizplus · Accepted Answer

Cost refers to the expenses incurred in the production of a good, including both monetary and non-monetary costs. On the other hand, price is the monetary value that a seller charges for a good or service. Therefore, the best description of cost is what must be given up to produce a good, while the best description of price is what a seller receives when the good is sold.

Which of the Following Describes the Economic Meanings of Cost