Price vs. Rate: Know the Difference
By Shumaila Saeed || Updated on November 12, 2023
Price is the cost assigned to a good or service, while rate is a ratio or standard measure, often referring to a unit price or speed.
In the context of commerce, the price is what a consumer pays for a jacket or a loaf of bread. It’s a one-dimensional figure, easy to identify and understand. A rate, however, could refer to the interest charged on a loan per year, revealing a temporal aspect that price does not inherently possess. Rates quantify a transaction or occurrence over time or per unit, which prices do not necessarily do.
The price is typically a static figure for individual items or services at a given time. It is straightforward: one price for one item. Rates, on the other hand, can be complex, reflecting changes over time or adjustments for different quantities. For example, the price of an airline ticket is set when purchased, but the rate can vary, such as when priced per mile.
Price is what you check when buying a cup of coffee; it's an absolute amount. The rate might be considered when evaluating the cost per ounce of that coffee or comparing the cost versus the number of ounces. The price is an absolute cost, while a rate is a relative measure. Rates often apply in services or situations where the quantity or time affects the total cost, whereas price is static regardless of quantity or time.
Lastly, price is a term used in everyday transactions for goods or services; it’s a part of everyday vocabulary. Rate, though also common, is more frequently associated with measurements, statistics, services, or situations where a comparison or calculation is made, such as in finance for interest rates or in services where costs vary by usage.
Price is a quantified value exchanged for a product or service, often denoted in currency. It is the tag that tells you how much money you need to give up to acquire something. Rate, conversely, implies a relationship between two quantities, expressing the proportional value of one against another. While the price of a commodity is fixed for a transaction, the rate can fluctuate based on duration, quantity, or other variables.
The cost of a single item or service
A ratio or measurement over another unit
Often static and absolute
Dependent on time, quantity, or usage
Context of Use
Retail, commerce, everyday transactions
Finance, services, measurements
Less variable, set at point of sale
Highly variable, can change with conditions
Unit of Measure
Monetary units (e.g., USD, EUR)
Per unit basis (e.g., per hour, per mile)
Price and Rate Definitions
The odds in betting.
He placed a bet at odds, or a price, of 5 to 1.
The speed with which something moves or happens.
The heart rate increased during exercise.
The amount as of money or goods, asked for or given in exchange for something else.
To assign a standard or value to something according to a particular scale.
They rated the movie 4 out of 5 stars.
The cost at which something is obtained
Believes that the price of success is hard work.
To consider or regard in a specified way.
She rated him highly for his honest work.
The cost of bribing someone
Maintained that every person has a price.
A quantity measured with respect to another measured quantity
A rate of speed of 60 miles an hour.
A reward offered for the capture or killing of a person
A felon with a price on his head.
A measure of a part with respect to a whole; a proportion
The mortality rate.
A tax rate.
(Archaic) Value or worth.
The cost per unit of a commodity or service
To fix or establish a price for
Shoes that are priced at sixty dollars.
A charge or payment calculated in relation to a particular sum or quantity
To find out the price of
Spent the day pricing dresses.
Level of quality.
The cost required to gain possession of something.
Often rates Chiefly British A locally assessed property tax.
The cost of an action or deed.
I paid a high price for my folly.
To place in a particular class, rank, or grade
Rated the film PG13.
Rated the bonds at junk level.
Value; estimation; excellence; worth.
To specify the performance limits of, especially according to a standard scale
This fuse is rated at 50 amperes. The fishing line is rated for 30 pounds.
(transitive) To determine the monetary value of (an item); to put a price on.
To regard or consider as having a certain value
Rated the movie excellent.
Rated him a fine cook.
To pay the price of; to make reparation for.
Chiefly British To value for purposes of taxation.
To set a price on; to value; to prize.
To set a rate for (goods to be shipped).
To ask the price of.
To price eggs
(Informal) To merit or deserve
People that rate special treatment.
An idea that rates attention.
The sum or amount of money at which a thing is valued, or the value which a seller sets on his goods in market; that for which something is bought or sold, or offered for sale; equivalent in money or other means of exchange; current value or rate paid or demanded in market or in barter; cost.
We can afford no more at such a price.
To be ranked in a particular class
A wine that rates higher than any other.
Value; estimation; excellence; worth.
Her price is far above rubies.
New treasures still, of countless price.
(Informal) To have status, importance, or influence
Tea-flavored ice cream doesn't rate highly in my book.
Reward; recompense; as, the price of industry.
'T is the price of toil,The knave deserves it when he tills the soil.
To pay the price of.
With thine own blood to price his blood.
To express reproof.
To set a price on; to value. See Prize.
(obsolete) The worth of something; value.
To ask the price of; as, to price eggs.
The proportional relationship between one amount, value etc. and another.
At the height of his powers, he was producing pictures at the rate of four a year.
The amount of money needed to purchase something;
The price of gasoline
He got his new car on excellent terms
How much is the damage?
The car was speeding down here at a hell of a rate.
The property of having material worth (often indicated by the amount of money something would bring if sold);
The fluctuating monetary value of gold and silver
He puts a high price on his services
He couldn't calculate the cost of the collection
The relative speed of change or progress.
The rate of production at the factory is skyrocketing.
Value measured by what must be given or done or undergone to obtain something;
The cost in human life was enormous
The price of success is hard work
What price glory?
The price of (an individual) thing; cost.
He asked quite a rate to take me to the airport.
The high value or worth of something;
Her price is far above rubies
A set price or charge for all examples of a given case, commodity, service etc.
Postal rates here are low.
A reward for helping to catch a criminal;
The cattle thief has a price on his head
A wage calculated in relation to a unit of time.
We pay an hourly rate of between $10 – $15 per hour depending on qualifications and experience.
Cost of bribing someone;
They say that every politician has a price
Any of various taxes, especially those levied by a local authority.
I hardly have enough left every month to pay the rates.
United States operatic soprano (born 1927)
(nautical) A class into which ships were assigned based on condition, size etc.; by extension, rank.
This textbook is first-rate.
Determine the price of;
The grocer priced his wares high
(obsolete) Established portion or measure; fixed allowance; ration.
Ascertain or learn the price of;
Have you priced personal computers lately?
(obsolete) Order; arrangement.
The amount of money expected, required, or given in payment for something.
The price of the smartphone was $999.
(obsolete) Ratification; approval.
An unwelcome experience or action undergone or done as a condition of achieving an objective.
The price of fame can often be a loss of privacy.
(horology) The gain or loss of a timepiece in a unit of time.
Daily rate; hourly rate; etc.
To determine the monetary value of (something).
They priced the house at $300,000.
(transitive) To assign or be assigned a particular rank or level.
She is rated fourth in the country.
To fix the price of something according to a particular standard.
They had to price their products competitively to survive in the market.
(transitive) To evaluate or estimate the value of.
They rate his talents highly.
(transitive) To consider or regard.
He rated this book brilliant.
(transitive) To deserve; to be worth.
The view here hardly rates a mention in the travel guide.
(transitive) To determine the limits of safe functioning for a machine or electrical device.
The transformer is rated at 10 watts.
To evaluate a property's value for the purposes of local taxation.
To like; to think highly of.
The customers don't rate the new burgers.
(intransitive) To have position (in a certain class).
She rates among the most excellent chefs in the world.
He rates as the best cyclist in the country.
(intransitive) To have value or standing.
This last performance of hers didn't rate very high with the judges.
(transitive) To ratify.
To ascertain the exact rate of the gain or loss of (a chronometer) as compared with true time.
(transitive) To berate, scold.
To chide with vehemence; to scold; to censure violently; to berate.
Go, rate thy minions, proud, insulting boy!
Conscience is a check to beginners in sin, reclaiming them from it, and rating them for it.
To set a certain estimate on; to value at a certain price or degree.
To rate a man by the nature of his companions is a rule frequent indeed, but not infallible.
You seem not high enough your joys to rate.
To assess for the payment of a rate or tax.
To settle the relative scale, rank, position, amount, value, or quality of; as, to rate a ship; to rate a seaman; to rate a pension.
To be set or considered in a class; to have rank; as, the ship rates as a ship of the line.
To make an estimate.
Established portion or measure; fixed allowance.
The one right feeble through the evil rateOf food which in her duress she had found.
That which is established as a measure or criterion; degree; standard; rank; proportion; ratio; as, a slow rate of movement; rate of interest is the ratio of the interest to the principal, per annum.
Heretofore the rate and standard of wit was different from what it is nowadays.
In this did his holiness and godliness appear above the rate and pitch of other men's, in that he was so . . . merciful.
Many of the horse could not march at that rate, nor come up soon enough.
Valuation; price fixed with relation to a standard; cost; charge; as, high or low rates of transportation.
They come at dear rates from Japan.
A tax or sum assessed by authority on property for public use, according to its income or value; esp., in England, a local tax; as, parish rates; town rates.
Thus sat they all around in seemly rate.
The gain or loss of a timepiece in a unit of time; as, daily rate; hourly rate; etc.
The order or class to which a war vessel belongs, determined according to its size, armament, etc.; as, first rate, second rate, etc.
Amount of a charge or payment relative to some basis;
A 10-minute phone call at that rate would cost $5
A magnitude or frequency relative to a time unit;
They traveled at a rate of 55 miles per hour
The rate of change was faster than expected
The relative speed of progress or change;
He lived at a fast pace
He works at a great rate
The pace of events accelerated
Assign a rank or rating to;
How would you rank these students?
The restaurant is rated highly in the food guide
Be worthy of or have a certain rating;
This bond rates highly
Estimate the value of;
How would you rate his chances to become President?
Gold was rated highly among the Romans
A measure, quantity, or frequency, typically one measured against another quantity or measure.
The rate of inflation is at 3% this year.
A fixed price paid or charged for something, especially goods or services.
The hourly rate for the contractor was $45.
Repeatedly Asked Queries
How is rate defined?
A rate is a ratio comparing two different quantities, such as cost per unit of measure.
Can the price of an item change over time?
Yes, prices can change due to demand, supply, or inflation.
Do prices include taxes?
Prices may or may not include taxes, depending on how they are advertised.
What exactly is a price?
A price is the amount of money charged for a product or service.
Can the price of services be negotiated?
Yes, the price of services can sometimes be negotiated between the provider and the consumer.
Are exchange rates a form of rate?
Yes, exchange rates express the value of one currency in terms of another.
Is an interest rate a type of rate?
Yes, an interest rate is the rate at which interest is paid by borrowers for the use of money.
How do rates affect loans?
Higher rates on loans mean more interest paid over the life of the loan.
Is the sticker price the final price?
The sticker price is often the starting point for negotiations and may not be the final sale price.
Does a rate always refer to money?
No, rates can refer to any measurable quantity, not just monetary values.
Are rates constant?
Rates can vary depending on factors like time, usage, or market conditions.
Is the list price the same as the sale price?
No, the list price is the suggested price, while the sale price is what the customer pays after discounts.
Do utility companies charge rates?
Yes, utility companies charge rates based on the consumption of services like water, gas, or electricity.
Is MSRP the same as price?
MSRP stands for Manufacturer's Suggested Retail Price and is a recommended selling price.
Are discounts reflected in the price?
Yes, discounts are subtracted from the original price to provide a new sale price.
Do prices always include a profit margin?
Typically, yes, prices are set to include a margin above the cost for profit.
Can rates apply to time?
Yes, rates often apply to time, such as hourly wages or interest rates per year.
What influences a product's price?
Production costs, competition, brand, and market demand can influence a product’s price.
What is a tax rate?
A tax rate is the percentage at which income or value is taxed.
What is a flat rate?
A flat rate is a fixed charge for a service, regardless of usage or time.
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Written byShumaila Saeed
Shumaila Saeed, an expert content creator with 6 years of experience, specializes in distilling complex topics into easily digestible comparisons, shining a light on the nuances that both inform and educate readers with clarity and accuracy.