Bíllinn kostar mikið.

Breakdown of Bíllinn kostar mikið.

bíllinn
the car
kosta
to cost
mikið
a lot
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Questions & Answers about Bíllinn kostar mikið.

What is bíllinn and why does it end with -inn?
bíllinn is the definite form of the masculine noun bíll (“car”). In Icelandic you don’t use a separate word for “the” – instead you add a suffix to the noun. For masculine nouns in the singular nominative you add -inn to make it definite.
Why does the verb kostar end in -ar?
The infinitive of the verb is kosta (“to cost”). To form the present tense 3rd person singular, you take the stem (kost-) and add -ar, yielding kostar (“he/it costs”).
Is mikið here an adjective or an adverb?
Here mikið functions as an adverb of degree, meaning “a lot” or “much.” It modifies the verb kostar rather than describing a noun, so it does not take case or agree in gender/number.
Why does mikið end in -i? Isn’t mikill the adjective “big/much”?
Yes, mikill is an adjective (“big” or “much”). Its neuter singular form is mikið, and Icelandic often uses the neuter form of an adjective as an adverb. That’s why mikið (“much/a lot”) ends in -i here.
How would you ask “How much does the car cost?” in Icelandic?

You use the question word hvað (“what/how much”) and follow the V2 word order (verb second):
Hvað kostar bíllinn?
Literally: What costs the-car?

Could you express the same idea using an adjective like dýr (“expensive”)? How would that look?

Yes. Instead of talking about cost, you can state a quality:
Bíllinn er dýr.
That means “The car is expensive.” Note that kostar mikið focuses on the amount you pay, while er dýr simply calls the car “expensive.”

What if you want to say “A car costs a lot” (indefinite “a car”)?

Drop the definite suffix -inn, giving the indefinite singular:
Bíll kostar mikið.
Keep in mind that using a bare singular indefinite like this can sound generic or a bit odd in Icelandic; you might instead specify Bíll kostar mikinn pening (“A car costs a lot of money”).

Can you move mikið to the beginning of the sentence for emphasis?

Yes. Fronting the adverb highlights the degree:
Mikið kostar bíllinn!
This exclaims “Wow, the car costs a lot!” by placing the focus on mikið.