Value

Value, in economics, the worth of a commodity or service measured against other commodities or services. The term generally refers to the total money revenue, or price, for which an item will sell. The value of any object in the marketplace is determined by desirability and scarcity. Anything that is both desirable and scarce, such as a diamond, can command power in the exchange ratio—that is, it can be exchanged for an item of equal or greater worth. Its desirability is a function of its potential utility. A distinction is usually made between market value and normal, or natural, value. Market value is the purchasing power of a commodity in the open market on a given day; normal value is the value that would prevail if competitive market forces worked without friction. Market value may also be referred to as the exchange price of a commodity, and natural value as the just price.

In the labour theory of value, in the simplest terms, the value of a product is composed of, or created or determined by, all the labour involved in its production.

The term value added refers to the value created in a product in the course of manufacturing or processing, exclusive of such costs as those of raw materials, packaging, or overhead. A value added tax has been imposed on goods in all European Union countries.