Relative Price Calculator

Formula

The formula to calculate the Relative Price (RP) is:

\[ RP = \frac{CP}{Ref} \]

Where:

$RP$ is the Relative Price ($/$)
$CP$ is the current price ($)
$Ref$ is the reference price ($)

What is Relative Price?

Relative price is a measure that compares the price of one good or service to the price of another. It is often used in economics to understand the value of a good or service in relation to a reference price, which can be another good, a historical price, or a benchmark price. This comparison helps in making informed decisions about purchasing, investing, or pricing strategies.

Example Calculation

Let's assume the following values:

Current Price (CP) = $150
Reference Price (Ref) = $100

Using the formula to calculate the Relative Price (RP):

\[ RP = \frac{150}{100} = 1.50 \]

The Relative Price (RP) is 1.50.