PRICE MARGIN Meaning and
Definition
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Price margin refers to the difference between the cost price of a product or service and its selling price. It is a financial metric that indicates the profitability of a particular item or the overall business operations. This term is primarily used in the context of business, marketing, and economics.
The price margin is typically expressed as a percentage or a fixed amount. To calculate the price margin percentage, one needs to subtract the cost price from the selling price, and then divide the result by the cost price. This determines the percentage gain or loss made on the item. Alternatively, a fixed amount price margin is calculated by subtracting the cost price from the selling price.
Price margin plays a crucial role in determining the profitability of a business. It helps the company understand the extent of profit or loss it is making on each item or service sold. A higher price margin indicates greater profitability, while a lower margin suggests reduced profitability. It also assists businesses in setting the right selling price for their products, allowing them to cover costs and generate a reasonable profit.
Furthermore, the price margin can vary across different industries, products, and market conditions. Factors such as competition, demand, supply, production costs, and market trends can influence the price margin. Therefore, it is important for businesses to analyze and assess their price margins regularly to ensure they remain competitive and financially sustainable.
Common Misspellings for PRICE MARGIN
- orice margin
- lrice margin
- 0rice margin
- peice margin
- pdice margin
- pfice margin
- ptice margin
- p5ice margin
- p4ice margin
- pruce margin
- prjce margin
- prkce margin
- proce margin
- pr9ce margin
- pr8ce margin
- prixe margin
- prive margin
- prife margin
- pride margin
- pricw margin
Etymology of PRICE MARGIN
The word "price margin" does not have a specific etymology as it is a combination of two separate words: "price" and "margin".
- "Price" originated from the Middle English word "pris", which came from the Old French term "pris" meaning "price, value, reward". This ultimately derives from the Latin word "pretium" meaning "price, value, worth".
- "Margin" comes from the Latin word "margo" meaning "edge, brink, boundary". It entered Middle English as "margine" and eventually transformed into "margin".
Therefore, when combined, "price margin" simply refers to the difference between the cost or value of a product and its selling price. Consequently, the etymology of the phrase lies in the origins of its constituent words.
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