<p>The value is subjective. If the buyer values the shoes at 10 yuan and the seller values 10 yuan at 10 yuan then from economic perspective equal amount of value was exchanged (i.e 10 value of yuan embedded in paper notes for 10 value of yuan embedded in shoes) regardless of what were the costs of production costs. </p>

<p>Also money just serves to solve double coincidence of wants ultimately people exchange just goods and services for another goods and services. In microeconomic exchanges like buying shoes money does not matter at all.</p>

<p>Response to edit of a question:</p>

<p>I think that your confusion stems from not understanding the definition of value. Goods in economics dont have value based on their cost of production but value is determined subjectively. That is if a shoe leather costs \$10 and labor used to produce shoe \$30 that does not mean that shoe has \$40 value. The value of shoe that costed \$40 to produce can be anything in range <span class="math-container">$[0,\infty)$</span>. The value depends on the customer subjective valuation. If shoe that costed shoemaker \$40 is by all consumers valued at \$ 0 then that is the true value of the shoe. If all consumers believe that the shoe has value \$100,000 then that is it's true value.</p>

<p>Going back to the exchanges, which is your question about there can be only 4 kinds of exchange (where the world exchange implies that the transaction is voluntary i.e. no theft or something like that):</p>

<ol>
<li>Both from seller and buyer perspective equal value is exchanged. That is both buyer and seller value shoe at exactly \$100.</li>
<li>From buyer perspective equal value is gain but from seller
perspective more value is gained. For example, buyer values shoe at \$100 so buyer exchanges \$100 for the shoe, but seller only values the shoe \$40 so seller has \$ 60 gain in value.</li>
<li>from buyer perspective
more value is gained but from sellers perspective equal value is
gained. Buyer values the shoes at \$ 100 and seller only asks for \$40 and seller values the shoe at \$40. </li>
<li>both parties gain more value. Buyer values the shoe at \$ 100 and seller at \$ 40 but they agree on price \$ 50, so buyer gained \$50 of extra value and seller extra \$10</li>
</ol>

<p>The case 1, and 4 can be seen in standard Demand and Supply diagram below<a href="https://i.sstatic.net/z5cQrm.jpg" rel="nofollow noreferrer"><img src="https://i.sstatic.net/z5cQrm.jpg" alt="enter image description here"></a></p>

<p>At exactly equilibrium price where S=D the last buyer and last seller exchange exactly the same value as they both value the good at exactly the same price (case 1). Left of the equilibrium price both seller and buyer get surplus value (case 4). A case 2 and 3 could be showed on a Demand and Supply diagram where in the first case supply is flat and in a second case demand is flat (I did not wanted to add too many pictures to my answer so I left only this one I trust that you can imagine either of them being horizontal flat lines.  Right of the equilibrium price no exchange is possible as in that area either buyer or seller would actually experience value loss from transaction. A sane person would never enter into exchange where the person would loose - in that case either the person is not rational or the person was coerced hence we are no longer taking about exchange but about theft or scam.  </p>

<p>To sum it up: In an exchange, which implies voluntary change of something for something else there cannot be any loss. There can be only equal exchange which is the minimum condition for exchange to occur at all, or there can be exchange where both, or one of the parties benefit. But there can be no losses. Empirically majority of exchanges involve exchange where both parties benefit, however since you are asking if there could be equivalent exchange the answer is yes, it is the marginal exchange on the market and all other previous exchanges had to be either mutually beneficial or equal for one side while being beneficial for the other side.</p>

CC BY-SA 4.0
2020-01-04T23:52:38.183Z
So in fact, the exchange is not equivalent. The buyer bought 10 yuan shoes with 100 yuan. So the seller got rich.
enbin
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2020-01-04T23:53:51.950Z
@enbinzheng no they bought it for 10 yuan where did you get the 100 from? Regardless if the example would be 100 yuan if the consumer values it at 100 and the seller values yuan at its nominal value then the exchange is again equivalent 100 value imbedded in shoes for 100 value imbedded in money
1muflon1
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2020-01-04T23:58:17.313Z
I mean: the buyer paid $100 and bought $10 shoes. So the seller got rich.
enbin
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2020-01-05T00:09:33.567Z
@enbinzheng if the customer values the shoes at 100 yuan then he must get back at least 100 yuan worth of value out of them at minimum else that person would never exchange the money for shoes. If what you saying would be true then everyone would always loose by consuming anything which is nonsense. As a matter of fact in economics what makes you rich is consumption not money. Money is only means to your own consumption if you sell 100y worth of shoes and use that 100y to buy 100y worth of books you got the exactly same value. If you never spend your money then you will get no value in return.
1muflon1
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2020-01-05T01:00:14.920Z
The seller knows that his shoes are only $10, while the buyer's shoes are $100. In this case, is it an equivalent exchange?
enbin
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2020-01-05T01:06:45.407Z
@enbinzheng but that does not matter from buyers perspective it is because the buyer **must** value the shoes at \$100 otherwise exchange would not take place. From sellers perspective it’s net gain of \$90 if seller values the shoes at \$10. Exchange can only occur between parties in 4 scenarios: 1 both from seller and buyer perspective equal value is gain, 2 from buyer perspective equal value is gain but from seller perspective more value is gained, 3 from buyer perspective value is more value is gained but from sellers perspective equal value is gained, 4 both parties gain more value
1muflon1
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2020-01-05T01:17:02.623Z
The buyer didn't know that the seller's shoes were only $10, plus advertising and other guidance, the buyer bought shoes with $100, so the seller made $90. The seller is rich.
enbin
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2020-01-05T02:00:59.423Z
@enbinzheng I updated my question in response to your edit which is based on the last comment so you will find answer there
1muflon1
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2020-01-05T12:50:24.667Z
https://economics.stackexchange.com/a/33504/25350
enbin
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2020-01-05T13:13:16.190Z
@1muflon1 Sometimes it is best not to engage.
Giskard
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2020-01-04T23:35:57.290Z
2020-01-05T02:47:37.053Z
2020-01-05T02:47:37.053Z
1muflon1
<p>The seller's idea is different from the buyer's. The seller wants to make money, so the seller can't ignore the cost. The buyer does not know the cost of shoes, so the evaluation may not be accurate, and the seller will use various means (such as advertising, preferential, packaging, etc.) to interfere with the buyer's judgment, making its evaluation higher than the actual cost of the seller. So sellers try to realize unequal exchange.</p>

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2020-01-06T15:52:58.460Z
This is true, but buyers also try to realize unequal exchange.
Criticize SE actions means ban
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2020-01-06T15:54:14.167Z
When both sellers *and* buyers try to make the exchange unequal, we hope that the exchange is approximately equal. Why are you buying 10 yuan shoes for 100 yuan? Find another store which sells them for 10 yuan.
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2020-01-06T22:31:02.570Z
@user253751 Yes, but the information is asymmetric.
enbin
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2020-01-07T11:12:19.643Z
Unfortunately yes. Information is asymmetric. You still have the choice to look for another store, make your own shoes, or make your own store. If you could open your own store next to their store, and sell the shoes for 70 yuan, you would make lots of profit!
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2020-01-07T22:36:57.527Z
@user253751 I can choose other stores, and other stores also have asymmetric information.  And I also need cars, houses, clothes, bread, and so on, so I ca n’t all open my own shop.
enbin
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2020-01-08T10:35:02.490Z
However, someone in your city (because it's a big city) *likes* selling shoes, so they *did* think about opening their own shop. And for some reason, they found out they would lose money if they opened a shop next to the 100-yuan shop and sold the same shoes for 70 yuan.
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2020-01-08T10:35:55.853Z
Same for bread. Someone who *liked baking* thought the bakery was too expensive. Why didn't they open their own bakery that was cheaper? Well, maybe they did, then you should buy your bread there, or maybe they didn't because they would lose money, which means the first bakery wasn't actually too expensive.
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2020-01-08T10:36:24.743Z
This is why free markets are supposed to have fair prices.
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2020-01-08T12:23:51.170Z
@user253751 Because of the competition among the merchants, they have to reduce the price. If there is no competition from other businesses, the price will be very high.
enbin
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2020-01-08T12:45:16.927Z
Yes. That is how that works. The second part is often forgotten by people who think the free market will solve everything. The first part is often forgotten by people who think the free market will solve nothing.
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2020-01-08T14:29:40.423Z
Also the fact that you don't want to open a shoe shop might be exactly why the shoes are expensive! Things that nobody wants to do are worth more money. If nobody wants to open a shoe shop, but everyone needs shoes, then the one person who opens one anyway gets paid a lot.
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2020-01-08T23:09:25.010Z
@user253751 With higher profits, someone will open a new store.  But not everyone will open a store. Some people don't like to open a store, they like other things.
enbin
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2020-01-08T23:27:09.993Z
Only one person has to open a new store to lower the prices.
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2020-01-09T15:11:51.727Z
@user253751 Businessmen are forced to reduce their prices, so what they like is not equal exchange, but not equal exchange. Equal value exchange is a deceptive package of businessmen.
enbin
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2020-01-09T16:16:53.513Z
I never said businessmen like equal exchange. But as long as there are 2 businessmen, if they do not collude, their greed will cause "equal exchange" to happen.
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2020-01-09T22:56:30.500Z
@user253751 First, they will use a differentiation strategy, they will show customers that their products are different from others, so the price is higher.  Second, they all want to make money, so they will form a tacit agreement to guarantee their profits.  It can also be said that this is their industry ethics.
enbin
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2020-01-10T10:18:05.983Z
This is why there are laws in many countries that make those tacit agreements illegal.
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2020-01-10T10:18:47.600Z
As for differentiation: if you buy an iPhone instead of an Android phone, even though you know it is more expensive, you deserve to pay more for making that decision, don't you? If you wanted it cheap you should have chosen Android.
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2020-01-10T10:32:29.627Z
@user253751 No matter what phone you choose, you will pay more than the cost.  So you are still cheated.  Legally cheated.
enbin
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2020-01-10T10:33:34.300Z
Not necessarily. For iPhone yes, because there is no competition. I think you might be forgetting about the cost of the creator's time, store's rent, and so on.
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2020-01-10T10:38:52.047Z
@user253751 Why do businesses adopt different strategies?  To avoid competition.  So there is no competition in that area of ​​difference.  The iPhone is just one form of the difference.
enbin
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2020-01-10T10:48:22.433Z
So do you want the expensive one or the cheap one?
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2020-01-11T06:42:51.647Z
@user253751 The difference strategy makes people seduced, so some people will buy expensive ones.
enbin
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2020-01-12T17:54:25.830Z
So basically you're saying people are idiots?
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2020-01-12T22:46:10.810Z
@user253751 No, Adam and Eve knew they couldn't eat the apples on the tree, but they did because they were tempted. Man is not God.
enbin
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2020-01-13T10:35:29.497Z
So the problem would be solved if people learned to be less tempted?
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2020-01-15T00:32:02.983Z
@Human nature is flawed, otherwise why should there be God?user253751
enbin
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2020-01-15T10:12:25.810Z
there isn't god
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2020-01-05T12:49:35.387Z
2020-01-05T12:49:35.387Z
enbin
<p>There is no equivalent exchange. I think it doesn't exist. The so-called equivalent exchange is imaginary. In exchange, one side always makes money while the other side loses money. For example, if you buy shoes with money, assuming that the cost of shoes is only one yuan, but the money you pay is 10 yuan, this is not an equivalent exchange. Right?</p>

<p>The buyer didn't know that the seller's shoes were only 10yuan, plus advertising and other guidance, the buyer bought shoes with 100yuan, so the seller made  90yuan. The seller is rich. So this is not an equivalent exchange.</p>

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2020-01-05T03:15:05.327Z
Voting to close because this is not a question.
dismalscience
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2020-01-05T03:51:52.253Z
@dismalscience The buyer didn't know that the seller's shoes were only 10yuan, plus advertising and other guidance, the buyer bought shoes with 100yuan, so the seller made 90yuan. The seller is rich. So this is not an equivalent exchange.
enbin
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2020-01-06T03:52:21.710Z
Price $\neq$ value
Brennan
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2020-01-06T06:37:23.870Z
@Brennan So what do you use to express value?
enbin
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2020-01-06T07:47:10.640Z
If we consider both value and prices in terms of monetary units we can have situations where the subjective value of a good is worth more/less than or equal to its price. The answer provided by @1muflon1 is an excellent explanation. I think what you have defined a “equivalent exchange” is where you’re getting tripped up, what do you mean by it?
Brennan
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2020-01-06T13:43:50.677Z
@Brennan The price paid by the buyer will be greater than the cost of the product.  The reason is that the information is asymmetric and it is difficult to correctly judge the cost of the product.
enbin
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2020-01-06T15:51:27.000Z
@enbinzheng What is cost? If I buy 10 yuan of materials, and I spend two hours turning the materials into a pair of shoes, what is the cost?
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2020-01-06T21:26:47.767Z
Why would I as a buyer care about the cost? Lets say I value the shoes at $120, as in I would be willing to pay $120 for the shoes. The seller is posting them up for $100, wow what a deal, I am getting them for $20 less than the most I would want to pay for them! I get a net benefit of $20, why would I care if the seller made them for $10 or $50 or whatever, it does not matter to me. There is asymmetric information but why would I need to judge the cost of the product?
Brennan
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2020-01-06T21:56:28.230Z
@user253751 Is there a whole set of cost calculation methods?
enbin
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2020-01-06T22:18:43.460Z
@Brennan Yes, you may not care about the cost, but the seller is very concerned about the cost. The seller welcomes a buyer like you. The seller's \$10 shoes were purchased by you for \$100, and the seller made \$90. Wow, the business is very happy. That's what makes a seller rich. The seller smiles and welcomes you to buy his shoes again.
enbin
CC BY-SA 4.0
2020-01-07T11:10:29.760Z
@enbinzheng No, cost is not something complicated. It is exactly what it sounds like. If I buy 10 yuan of materials, and spend 2 hours, the cost is *more than 10 yuan*, isn't it, because it also cost time? If I can sell the shoes for 100 yuan, then I earned 45 yuan per hour.
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2020-01-08T01:26:31.310Z
Yes, so where does this idea of "equivalent exchange" come in? define it
Brennan
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2020-01-08T10:31:58.957Z
I think this should be reopened. It's a basic question about economics. It can probably be answered by answering "Why don't sellers just make their prices $1000?"
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2020-01-08T12:15:29.723Z
@user253751 My question is a good one.
enbin
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2020-01-08T12:18:43.670Z
@user253751 Because of the competition among the merchants, they have to reduce the price. If there is no competition from other businesses, the price will be very high.
enbin
CC BY-SA 4.0
2020-01-08T12:51:35.857Z
You may also be interested in this question: https://economics.stackexchange.com/questions/33304/who-set-the-price-on-product-in-the-usa
Criticize SE actions means ban
CC BY-SA 4.0
2020-01-08T13:36:12.633Z
@user253751 It's OK to set a high price, but there must be enough customers around you to make them buy high priced products. This kind of control can use the temptation of advertisement and product.
enbin
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2020-01-08T14:28:50.490Z
@enbinzheng Having more customers around doesn't make all of them buy overpriced products. (Some of them will, by chance, but not many)
Criticize SE actions means ban
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2020-01-08T15:05:10.007Z
@user253751 A businessman doesn't need all the people to buy his products, as long as some people buy them.
enbin
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2020-01-08T16:23:33.827Z
@enbinzheng correct, that is also how scams work. You don't need all the people to give you their money, as long as some people do. So don't get scammed.
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CC BY-SA 4.0
2020-01-08T23:02:50.237Z
@user253751 In the market, customers have been cheated. The cost of products they buy is not high, but the money they pay is higher than the cost.
enbin
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2020-01-08T23:27:25.657Z
Then buy the ingredients and make the product yourself.
Criticize SE actions means ban
CC BY-SA 4.0
2020-01-09T15:17:29.427Z
@user253751 Due to information asymmetry and other reasons, many customers do not realize that they have been cheated.
enbin
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2020-01-09T16:17:32.330Z
@enbinzheng This is true. I think the free market answer is: the customers are stupid and should have done more research before buying something. If they did not do their research then they deserve to be cheated.
Criticize SE actions means ban
CC BY-SA 4.0
2020-01-09T23:11:01.647Z
@user253751 Many products, limited customer time, asymmetric information, etc., all these determine that customers will not have in-depth research.
enbin
<macroeconomics><microeconomics><labor-economics>
Is there no equivalent exchange?
enbin
# Is there no equivalent exchange?

(Asked by: username_0 on 2020-01-04)

There is no equivalent exchange. I think it doesn't exist. The so-called equivalent exchange is imaginary. In exchange, one side always makes money while the other side loses money. For example, if you buy shoes with money, assuming that the cost of shoes is only one yuan, but the money you pay is 10 yuan, this is not an equivalent exchange. Right?

The buyer didn't know that the seller's shoes were only 10yuan, plus advertising and other guidance, the buyer bought shoes with 100yuan, so the seller made 90yuan. The seller is rich. So this is not an equivalent exchange.

**Tags:** macroeconomics, microeconomics, labor-economics

> **Comments:**
> **username_1**: Voting to close because this is not a question.  
> **username_0**: @username_1 The buyer didn't know that the seller's shoes were only 10yuan, plus advertising and other guidance, the buyer bought shoes with 100yuan, so the seller made 90yuan. The seller is rich. So this is not an equivalent exchange.  
> **username_2**: Price $\neq$ value  
> **username_0**: @username_2 So what do you use to express value?  
> **username_2**: If we consider both value and prices in terms of monetary units we can have situations where the subjective value of a good is worth more/less than or equal to its price. The answer provided by @username_4 is an excellent explanation. I think what you have defined a “equivalent exchange” is where you’re getting tripped up, what do you mean by it?  
> **username_0**: @username_2 The price paid by the buyer will be greater than the cost of the product.  The reason is that the information is asymmetric and it is difficult to correctly judge the cost of the product.  
> **username_3**: @username_0zheng What is cost? If I buy 10 yuan of materials, and I spend two hours turning the materials into a pair of shoes, what is the cost?  
> **username_2**: Why would I as a buyer care about the cost? Lets say I value the shoes at $120, as in I would be willing to pay $120 for the shoes. The seller is posting them up for $100, wow what a deal, I am getting them for $20 less than the most I would want to pay for them! I get a net benefit of $20, why would I care if the seller made them for $10 or $50 or whatever, it does not matter to me. There is asymmetric information but why would I need to judge the cost of the product?  
> **username_0**: @user253751 Is there a whole set of cost calculation methods?  
> **username_0**: @username_2 Yes, you may not care about the cost, but the seller is very concerned about the cost. The seller welcomes a buyer like you. The seller's \$10 shoes were purchased by you for \$100, and the seller made \$90. Wow, the business is very happy. That's what makes a seller rich. The seller smiles and welcomes you to buy his shoes again.  
> **username_3**: @username_0zheng No, cost is not something complicated. It is exactly what it sounds like. If I buy 10 yuan of materials, and spend 2 hours, the cost is *more than 10 yuan*, isn't it, because it also cost time? If I can sell the shoes for 100 yuan, then I earned 45 yuan per hour.  
> **username_2**: Yes, so where does this idea of "equivalent exchange" come in? define it  
> **username_3**: I think this should be reopened. It's a basic question about economics. It can probably be answered by answering "Why don't sellers just make their prices $1000?"  
> **username_0**: @user253751 My question is a good one.  
> **username_0**: @user253751 Because of the competition among the merchants, they have to reduce the price. If there is no competition from other businesses, the price will be very high.  
> **username_3**: You may also be interested in this question: https://economics.stackexchange.com/questions/33304/who-set-the-price-on-product-in-the-usa  
> **username_0**: @user253751 It's OK to set a high price, but there must be enough customers around you to make them buy high priced products. This kind of control can use the temptation of advertisement and product.  
> **username_3**: @username_0zheng Having more customers around doesn't make all of them buy overpriced products. (Some of them will, by chance, but not many)  
> **username_0**: @user253751 A businessman doesn't need all the people to buy his products, as long as some people buy them.  
> **username_3**: @username_0zheng correct, that is also how scams work. You don't need all the people to give you their money, as long as some people do. So don't get scammed.  
> **username_0**: @user253751 In the market, customers have been cheated. The cost of products they buy is not high, but the money they pay is higher than the cost.  
> **username_3**: Then buy the ingredients and make the product yourself.  
> **username_0**: @user253751 Due to information asymmetry and other reasons, many customers do not realize that they have been cheated.  
> **username_3**: @username_0zheng This is true. I think the free market answer is: the customers are stupid and should have done more research before buying something. If they did not do their research then they deserve to be cheated.  
> **username_0**: @user253751 Many products, limited customer time, asymmetric information, etc., all these determine that customers will not have in-depth research.  

---

## 2 answers

### Answer by username_4 on 2020-01-04. Score: 2

The value is subjective. If the buyer values the shoes at 10 yuan and the seller values 10 yuan at 10 yuan then from economic perspective equal amount of value was exchanged (i.e 10 value of yuan embedded in paper notes for 10 value of yuan embedded in shoes) regardless of what were the costs of production costs.

Also money just serves to solve double coincidence of wants ultimately people exchange just goods and services for another goods and services. In microeconomic exchanges like buying shoes money does not matter at all.

Response to edit of a question:

I think that your confusion stems from not understanding the definition of value. Goods in economics dont have value based on their cost of production but value is determined subjectively. That is if a shoe leather costs \$10 and labor used to produce shoe \$30 that does not mean that shoe has \$40 value. The value of shoe that costed \$40 to produce can be anything in range $[0,\infty)$. The value depends on the customer subjective valuation. If shoe that costed shoemaker \$40 is by all consumers valued at \$ 0 then that is the true value of the shoe. If all consumers believe that the shoe has value \$100,000 then that is it's true value.

Going back to the exchanges, which is your question about there can be only 4 kinds of exchange (where the world exchange implies that the transaction is voluntary i.e. no theft or something like that):

1. Both from seller and buyer perspective equal value is exchanged. That is both buyer and seller value shoe at exactly \$100.
2. From buyer perspective equal value is gain but from seller
   perspective more value is gained. For example, buyer values shoe at \$100 so buyer exchanges \$100 for the shoe, but seller only values the shoe \$40 so seller has \$ 60 gain in value.
3. from buyer perspective
   more value is gained but from sellers perspective equal value is
   gained. Buyer values the shoes at \$ 100 and seller only asks for \$40 and seller values the shoe at \$40.
4. both parties gain more value. Buyer values the shoe at \$ 100 and seller at \$ 40 but they agree on price \$ 50, so buyer gained \$50 of extra value and seller extra \$10

The case 1, and 4 can be seen in standard Demand and Supply diagram below[![enter image description here](https://i.sstatic.net/z5cQrm.jpg)](https://i.sstatic.net/z5cQrm.jpg)

At exactly equilibrium price where S=D the last buyer and last seller exchange exactly the same value as they both value the good at exactly the same price (case 1). Left of the equilibrium price both seller and buyer get surplus value (case 4). A case 2 and 3 could be showed on a Demand and Supply diagram where in the first case supply is flat and in a second case demand is flat (I did not wanted to add too many pictures to my answer so I left only this one I trust that you can imagine either of them being horizontal flat lines. Right of the equilibrium price no exchange is possible as in that area either buyer or seller would actually experience value loss from transaction. A sane person would never enter into exchange where the person would loose - in that case either the person is not rational or the person was coerced hence we are no longer taking about exchange but about theft or scam.

To sum it up: In an exchange, which implies voluntary change of something for something else there cannot be any loss. There can be only equal exchange which is the minimum condition for exchange to occur at all, or there can be exchange where both, or one of the parties benefit. But there can be no losses. Empirically majority of exchanges involve exchange where both parties benefit, however since you are asking if there could be equivalent exchange the answer is yes, it is the marginal exchange on the market and all other previous exchanges had to be either mutually beneficial or equal for one side while being beneficial for the other side.

> **Comments:**
> **username_0**: So in fact, the exchange is not equivalent. The buyer bought 10 yuan shoes with 100 yuan. So the seller got rich.  
> **username_4**: @username_0zheng no they bought it for 10 yuan where did you get the 100 from? Regardless if the example would be 100 yuan if the consumer values it at 100 and the seller values yuan at its nominal value then the exchange is again equivalent 100 value imbedded in shoes for 100 value imbedded in money  
> **username_0**: I mean: the buyer paid $100 and bought $10 shoes. So the seller got rich.  
> **username_4**: @username_0zheng if the customer values the shoes at 100 yuan then he must get back at least 100 yuan worth of value out of them at minimum else that person would never exchange the money for shoes. If what you saying would be true then everyone would always loose by consuming anything which is nonsense. As a matter of fact in economics what makes you rich is consumption not money. Money is only means to your own consumption if you sell 100y worth of shoes and use that 100y to buy 100y worth of books you got the exactly same value. If you never spend your money then you will get no value in return.  
> **username_0**: The seller knows that his shoes are only $10, while the buyer's shoes are $100. In this case, is it an equivalent exchange?  
> **username_4**: @username_0zheng but that does not matter from buyers perspective it is because the buyer **must** value the shoes at \$100 otherwise exchange would not take place. From sellers perspective it’s net gain of \$90 if seller values the shoes at \$10. Exchange can only occur between parties in 4 scenarios: 1 both from seller and buyer perspective equal value is gain, 2 from buyer perspective equal value is gain but from seller perspective more value is gained, 3 from buyer perspective value is more value is gained but from sellers perspective equal value is gained, 4 both parties gain more value  
> **username_0**: The buyer didn't know that the seller's shoes were only $10, plus advertising and other guidance, the buyer bought shoes with $100, so the seller made $90. The seller is rich.  
> **username_4**: @username_0zheng I updated my question in response to your edit which is based on the last comment so you will find answer there  
> **username_0**: https://economics.stackexchange.com/a/33504/25350  
> **username_5**: @username_4 Sometimes it is best not to engage.  

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### Answer by username_0 on 2020-01-05. Score: -1

The seller's idea is different from the buyer's. The seller wants to make money, so the seller can't ignore the cost. The buyer does not know the cost of shoes, so the evaluation may not be accurate, and the seller will use various means (such as advertising, preferential, packaging, etc.) to interfere with the buyer's judgment, making its evaluation higher than the actual cost of the seller. So sellers try to realize unequal exchange.

> **Comments:**
> **username_3**: This is true, but buyers also try to realize unequal exchange.  
> **username_3**: When both sellers *and* buyers try to make the exchange unequal, we hope that the exchange is approximately equal. Why are you buying 10 yuan shoes for 100 yuan? Find another store which sells them for 10 yuan.  
> **username_0**: @user253751 Yes, but the information is asymmetric.  
> **username_3**: Unfortunately yes. Information is asymmetric. You still have the choice to look for another store, make your own shoes, or make your own store. If you could open your own store next to their store, and sell the shoes for 70 yuan, you would make lots of profit!  
> **username_0**: @user253751 I can choose other stores, and other stores also have asymmetric information.  And I also need cars, houses, clothes, bread, and so on, so I ca n’t all open my own shop.  
> **username_3**: However, someone in your city (because it's a big city) *likes* selling shoes, so they *did* think about opening their own shop. And for some reason, they found out they would lose money if they opened a shop next to the 100-yuan shop and sold the same shoes for 70 yuan.  
> **username_3**: Same for bread. Someone who *liked baking* thought the bakery was too expensive. Why didn't they open their own bakery that was cheaper? Well, maybe they did, then you should buy your bread there, or maybe they didn't because they would lose money, which means the first bakery wasn't actually too expensive.  
> **username_3**: This is why free markets are supposed to have fair prices.  
> **username_0**: @user253751 Because of the competition among the merchants, they have to reduce the price. If there is no competition from other businesses, the price will be very high.  
> **username_3**: Yes. That is how that works. The second part is often forgotten by people who think the free market will solve everything. The first part is often forgotten by people who think the free market will solve nothing.  
> **username_3**: Also the fact that you don't want to open a shoe shop might be exactly why the shoes are expensive! Things that nobody wants to do are worth more money. If nobody wants to open a shoe shop, but everyone needs shoes, then the one person who opens one anyway gets paid a lot.  
> **username_0**: @user253751 With higher profits, someone will open a new store.  But not everyone will open a store. Some people don't like to open a store, they like other things.  
> **username_3**: Only one person has to open a new store to lower the prices.  
> **username_0**: @user253751 Businessmen are forced to reduce their prices, so what they like is not equal exchange, but not equal exchange. Equal value exchange is a deceptive package of businessmen.  
> **username_3**: I never said businessmen like equal exchange. But as long as there are 2 businessmen, if they do not collude, their greed will cause "equal exchange" to happen.  
> **username_0**: @user253751 First, they will use a differentiation strategy, they will show customers that their products are different from others, so the price is higher.  Second, they all want to make money, so they will form a tacit agreement to guarantee their profits.  It can also be said that this is their industry ethics.  
> **username_3**: This is why there are laws in many countries that make those tacit agreements illegal.  
> **username_3**: As for differentiation: if you buy an iPhone instead of an Android phone, even though you know it is more expensive, you deserve to pay more for making that decision, don't you? If you wanted it cheap you should have chosen Android.  
> **username_0**: @user253751 No matter what phone you choose, you will pay more than the cost.  So you are still cheated.  Legally cheated.  
> **username_3**: Not necessarily. For iPhone yes, because there is no competition. I think you might be forgetting about the cost of the creator's time, store's rent, and so on.  
> **username_0**: @user253751 Why do businesses adopt different strategies?  To avoid competition.  So there is no competition in that area of ​​difference.  The iPhone is just one form of the difference.  
> **username_3**: So do you want the expensive one or the cheap one?  
> **username_0**: @user253751 The difference strategy makes people seduced, so some people will buy expensive ones.  
> **username_3**: So basically you're saying people are idiots?  
> **username_0**: @user253751 No, Adam and Eve knew they couldn't eat the apples on the tree, but they did because they were tempted. Man is not God.  
> **username_3**: So the problem would be solved if people learned to be less tempted?  
> **username_0**: @Human nature is flawed, otherwise why should there be God?user253751  
> **username_3**: there isn't god  

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