Most often, people confuse between price and cost. Cost and price of a particular unit is different. Price is the rate at which the store is selling its products. For example, a pencil may be priced at Rs.10 . Cost is the expense the store had to incur for that product (in our case a pencil). It includes the rate at which the store bought it, plus the operating and miscellaneous costs per product. A store operates only when its price is greater than cost. The moment cost increase beyond price, for every unit sold, the store incurs a loss, and its better if the store shuts down. The situation where cost equals to price is termed as Shut Down Point.
Value is the rate pegged by the buyer on a product. For example, a retailer sells a pencil at Rs. 10. However you may peg a rate of Rs.15 on that product. That means that the buyer will be willing to buy that pencil, even if its price rises. Only when the price rises above Rs.15 will the buyer rethink buying the pencil.
Paintings, diamonds, memorabilia and other products are often sold in auctions. Auctions use the concept of value. People bid on the products at the value they peg. The person who values the item most would have bid the highest and wins the auction. However, value of concept is a crude method to explain auctions. More often than not the people who value the item most do not have sufficient money to place a bid, that is by default they value their money more than the item being auctioned.
PS: I recently wrote cost and price as two separate concepts while writing an answer in my Technical Report Writing course. The teachers correcting my answer sheet deducted marks, because according to her price and cost are the same. Even after arguing she refused to accept the truth. This post is a retort to that.
so u paid the 'price' for writing a correct thing and it 'cost' you marks :P
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