Rejection Cost. From the perspective that my profit is someone else’s loss, and someone else’s profit is my loss, the fact that I have to reject an opportunity to make money for my circumstances is a loss for me and an act of giving someone else a profit. In other words, my added value is not determined solely by productivity but also by the marginal utility generated by the law of supply and demand. Therefore, my labor price should reflect the value that I have given up—the profit I could have gained. If the rejection cost is not included in my profit, I will be at a loss to that extent. Failing to account for rejection costs in production expenses is not wise, but foolish, because it risks my survival. There is no absolute value in this world. All economic values are relative. - Joseph’s “just my thoughts”
In an exchange economy , where goods or services are well-made and exchanged for one another’s needs in the market, rather than through barter , ‘ price ’ holds significant importance. The key to business success lies in understanding the prime cost and establishing a ‘price’ based on that cost. If sales surge when a product that typically does not sell well is offered at a very low price, there must be a reason for the low price, as well as an explanation for why it does not sell at a higher price. The price results from the interaction of producers, consumers, and all other market variables . To identify the causes of problems in your business, you must first examine the price adequacy of the product or service you are selling. Price is not merely a number. - Joseph’s “just my thoughts”