What is the difference between value and price?

There is a major distinction in business between the terms value and price.  

Let's start with the term price.  The price of an object or service is what you spend to purchase the product or service.  For instance, if I purchase a television set, the price might be $500.  If I purchase a service, such as a haircut, the price might be $20.  A simple definition of price is the amount one pays to acquire the product or service.  Price is numerical.  For instance $1, $10, $100 are all numbers.

Conversely, value is the utility of the good or service to the consumer.  In other words, value is a person's opinion about the amount of worth the product or service has to you.  For instance, a business CEO who is about to go into a job interview might highly value an Italian suit because his appearance may impact the reactions of the interview committee.  The price of the Italian suit is high, but the value derived may be greater than the price.  On the other hand, a teacher may not find the same value in an Italian suit because the price is higher than the benefits derived from the suit.  A teacher does not have to dress in an Italian suit to teach children in a classroom.  Value cannot be calculated in numbers and varies from person to person.  

Let's take a classic Adam Smith example of price and value and consider the differences between diamonds and water.  We most certainly need water to survive, but we do not necessarily need diamonds to survive.  Yet, we are willing to pay a much higher price for a diamond than a bottle of water.  Why?  Well that comes down to the ease of acquiring such a product.  Water is abundantly available on Earth.  Diamonds require an intense amount of labor to extract from the Earth, and they are not readily available like water.