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What does relative price compare

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Relative price compares the price of a good or a service with the price of another item (for example, the same good by a different brand), or with other measures (how much you earn, etc.).

Relative price helps the consumer determine if they should consider an item expensive, reasonably-priced, or cheap.

To calculate the relative price of an item A compared with an item B, divide the price of A by the price of B.

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User Verushka
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