Respuesta :
Relative pricing, or the cost of one choice in relation to another, is how the opportunity cost is expressed.
When a market has a large number of sellers, but none of them are powerful enough to influence how much a product costs. The relative price must be equal to the opportunity cost because both goods must be created.
What do you mean by Relative cost ?
It is portrayed as a ratio of the costs of two goods or services. Divide the cost of one product by the cost of another to get the relative price of that product. Take coffee as an illustration. While one cup of coffee with almond milk costs $10, a big cup of cappuccino only $5.
- Its value in relation to another good, service, or collection of goods is its relative or true price. When comparing various products at the same time, the term "relative price" is employed.
- However, under a model of two-sector growth, the ratio of the productivity processes in the two sectors is equal to the relative price of capital. Data on wages and prices are combined with limitations from this model to create.
- Data on salaries and prices are combined with restrictions from this model to create measures of productivity growth and test the GHK identification, which the data readily rejects.
- The relative price will be higher if the opportunity cost of one commodity is lower in the country of origin.
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