Real prices and ideal prices in the context of "Exchange value"

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⭐ Core Definition: Real prices and ideal prices

The distinction between real prices and ideal prices is a distinction between actual prices paid for products, services, assets and labour (the net amount of money that actually changes hands), and computed prices which are not actually charged or paid in market trade, although they may facilitate trade. The difference is between actual prices paid, and information about possible, potential or likely prices, or "average" price levels.

This distinction should not be confused with the difference between "nominal prices" (current-value) and "real prices" (adjusted for price inflation, and/or tax and/or ancillary charges). It is more similar to, though not identical with, the distinction between "theoretical value" and "market price" in financial economics.

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👉 Real prices and ideal prices in the context of Exchange value

In political economy and especially Marxian economics, exchange value (German: Tauschwert) refers to one of the four major attributes of a commodity, i.e., an item or service produced for, and sold on the market, the other three attributes being use value, economic value, and price. Thus, a commodity has the following:

These four concepts have a very long history in human thought, from Aristotle to David Ricardo, and became more clearly distinguished as the development of commercial trade progressed but have largely disappeared as four distinct concepts in modern economics.

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