# component part of price

**Definition**  
A component part of price is one of the distinct elements that together determine the overall monetary value of a commodity. In Smith’s analysis, the price of a commodity is broken down into three primary components: wages of labour, profit of stock, and rent of land. Each component reflects a different source of economic value and is measured by the labour required to acquire or produce the commodity.

**Source Chapter**  
*The Wealth of Nations*, Book 1, Chapter 6.

**Context**  
Smith introduces the idea when discussing how the “whole produce of labour” is allocated and how the “price of commodities” resolves into separate parts. He argues that the price is not a single monolithic figure but a composite of labour, profit, and rent.

**Economic Domain**  
Exchange

**Smith’s Original Wording**  
> “In the price of commodities, therefore, the profits of stock constitute a component part altogether different from the wages of labour, and regulated by quite different principles.”

**Modern Interpretation**  
In contemporary economics, this concept aligns with the cost‑structure analysis of a product, where total price = variable costs (labour) + fixed costs (capital profit) + land rent (resource rent). It underpins the decomposition of price into factor‑income components.
