Question

Calculate the price relative

Answer 1

The price relative compares the price of one good to another. It is calculated by determining the relative price of one good in terms of the other.

Step-by-step explanation:

The price relative, also known as the relative price, compares the price of one good to another. To calculate the price relative, you need to determine the relative price of one good in terms of the other. For example, if the price of a yard of cloth is 8/9 of a yard of wheat, then the price relative of cloth in terms of wheat is 8/9.

Answer 2

146.3

Step-by-step explanation:

The price relative is the product of 100 and ratio of the current price to the base price. It is given as:

`Price\ relative=(P_n)/(P_o)*100\\\\Where\ P_n\ is\ the \ price\ of\ commodity\ in\ the\ current\ period\ while\ P_o\ is\\the\ price\ of\ commodity\ in\ base\ period.`

Given that the base price is the truck cost in 2008 = $27000 and the current price is the price of the truck in 2012 = $39500. Hence:

Price relative = ($39500 / $27000) * 100 = 146.3

Therefore the price relative is 146.3