# Cost of Production Theory of Value The cost of production theory of value is an extension of the [[Labor Theory of Value]] proposed by Adam Smith, who believed that the cost of labor is not enough to fully explain a commodity's price. Instead, he believed that **the price is also influenced by the value of a good's constituent parts, and all other expenses incurred during production.**[^1] ^rfj3g8 ![[Paradox of Value - Wikipedia#^hqyrbv]] Smith did not believe in a relation between price and utility from the point of view of the consumer (which is the subject of the [[Utility Theory of Value]]). Instead, he believed that production is the sole factor that determines price. [^1]: [[Theory of Value (Economics) - Wikipedia#^sc3xhs]]