Answer to Question #192567 in Economics of Enterprise for Suprise

Question

If there price of apples is R5 each and the price of Orange is R10 each? Explain what the absolute and relative prices of these fruits are

Answer 1

Case of Apple 

Absolute Price = R5 

$Relative \space Price = \frac{Price \space of \space Given \space Product\space (Apple)}{ Price \space of\space Other\space Good\space (Orange)}$

$Thus \space Pr = \frac{R5}{R10}\space i.e \space 1:2$

 

Case of orange

Absolute Price = R10

$Relative\space Price =\frac{Price \space of\space Given\space Product\space (Orange)}{ Price\space of\space Other\space Good\space (Apple)}$

$Pr= \frac{R10}{R5}\space i.e \space 2:1$