4 ms·
I disagree. Let’s say I buy something from you and I pay you $7 for it. Then, I sell it for $10. In this case, my cost $7, my revenue is $10, and the value I
by MR4D 7y ago
I disagree.
Let’s say I buy something from you and I pay you $7 for it. Then, I sell it for $10.
In this case, my cost $7, my revenue is $10, and the value I got from your item is $3.
It’s not always this clear cut, but sometimes it is.
- wodenokoto 7y agoNo, the value of 3 dollars varies from person to person. For Bill Gates, 3 dollars is near worthless. For a poor, 3rd world country citizen living on less than a dollar a day, 3 dollars is very valuable. Secondly, from your point of view it might be that 3 is 3. But if we look at the entire economy, things get extremely muddy. Maybe those ten dollars that the transaction is based on come from a loan based on a quantifier. So the bank lend out 10 dollars based on a 1 dollar holding. Now the money supply has increased, which all things equal will lower the value of each dollar. But all things are not equal. The economy is growing and if it is growing faster than the money supply is growing then the value of the dollar is still growing. The value of those 3 dollar profit is 3/[size of money supply] x [value of economy] And valuating the economy is extremely difficult. To the point where you could call it subjective.