Question

Develop both cost-and valuation-related explanations for real-world examples of apparently similar goods sold at different prices.

Answer 1

Cost is the price incurred for the product during production, in other words it is an estimate and price is tag given by the company to the product to sell as a policy and value is the expectation of the consumer for any commodity bought. Same products are sold for different prices across the world depending on the value perceived by each country as well as business also have the same effect. The law of one price is known as purchasing power parity but in real world these assumptions don't hold. Cars and electronic gadgets are good examples. The prices differ from
Country to country,this is because of the taxes and import duties incurred on the product. Taxes vary vastly from local tax to state tax. Other costs is the transportation costs. Apart from all this some product have perceived value for a common product which may be a premium product at a another country.