ABOVE MARKET COST Meaning and
Definition
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Above market cost refers to a price that is higher than the prevailing or average market value of a product, service, or asset. When something is sold or bought above market cost, it means that the agreed-upon price exceeds what is considered a fair or reasonable price based on market conditions.
This term is typically used when discussing purchases or sales in a competitive market environment. For example, if a buyer pays more than the market value for a house, they are paying an above market cost. Similarly, if a seller sets the price of their product or service higher than what similar offerings are currently being sold for, they are charging an above market cost.
The concept of above market cost is influenced by various factors such as supply and demand dynamics, competition, quality, and uniqueness of the product or service. It is important to note that above market cost is subjective and can vary depending on the perspective of the buyer and seller. What one party considers an above market cost may be seen as a fair or even a bargain by another.
In summary, above market cost refers to a price that exceeds the typical market value of a product, service, or asset. It signifies that the agreed-upon price is higher than what would be considered the fair or reasonable price in the prevailing market conditions.
