A Relative Price Is the

question 163

Multiple Choice

A relative price is the

• A) price of a substitute.
• B) price of a related good.
• C) price of one good divided by the price of another.
• D) absolute price of a good.
• E) price of one good multiplied by the price of another.

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Definitions:

Inverse Supply

A concept in economics that describes the relationship between the price of a good and the quantity supplied by producers, typically showing that as price decreases, the quantity supplied decreases.

Tax

Compulsory contributions to state revenue, levied by the government on workers' income, business profits, or added to the cost of some goods, services, and transactions.

Supply Curve

A graph representing the relationship between the price of a good or service and the quantity of it that producers are willing to supply.

Equilibrium Price

The market price at which the quantity of a good demanded equals the quantity supplied, leading to market stability.