The relative price of a good is that price
A)expressed in today's dollars.
B)expressed in constant 2012 dollars.
C)expressed in terms of the price of another good.
D)that is equal to the equilibrium price.

Question

Quizplus · Accepted Answer

The relative price of a good is the price of one good in terms of another good. For example, if the price of a gallon of milk is $4 and the price of a loaf of bread is $2, the relative price of milk in terms of bread is 2:1. This ratio indicates the number of loaves of bread that must be given up to purchase one gallon of milk.

The Relative Price of a Good Is That Price