Cost the limit of price
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Cost the limit of price was a maxim coined by Josiah Warren that holds that it is unethical to charge a higher price for a commodity than the cost of purchasing, producing or acquiring, and bringing it to market.
It is a strict interpretation of the labor theory of value, which holds that the value of a commodity is the amount of labor incurred in producing it or acquiring it.
[edit] Literal meaning
On its face the sentence seems to mean that "the limit of price is total cost" (including one-time cost, cost of capital and opportunity and other hidden costs), such that over time in a free, efficient, and competitive market, the price of a good will come arbitrarily close to the total cost in providing it. In practice, barriers to entry and inefficient markets increase the amount of profit at which firms with market power are willing to enter a market at a competitive price. If we consider such barriers (at times put up by anti-competitive behavior) to be unethical, then it might follow that even where the market may bear a higher price, it is unethical to capitalize on a larger-than-minimal profit. Companies such as Walmart, which operate at very low profit margins (generally 3%), might therefore be considered to be acting particularly ethically, since their price approaches their total costs in providing goods, even when it could be substantially higher.
