Price Premium

A price premium is a term used in marketing to describe the difference between the market price of a good and its actual cost to produce.

This difference is often due to the fact that some consumers are willing to pay more for a good than its market price would indicate.

For example, if the market price of a product is $10, but consumers are willing to pay $12 for it, then there is a 2% (or $2) price premium.

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