Value

• According to Prof. Taussig, “the value of a commodity means in economics is its power of securing other commodities in exchange.”
• It is the purchasing power of a good.
• If the commodity is not exchangeable in the market, it has no value.
• Commodity has value only when it is in market demand.

Price

• Value-in-exchange is called price.

Value Vs Price

• Value is the inherent quality of a good, price is what it can get in the market in terms of money
• Fresh air has great value but no price
• To have price, a commodity must have three things: utility, scarce, and transferable from one to another person.
• Goods which are neither scarce nor transferable-have a value-in-use only (Water and air have value-in-use but no value-in-exchange).