Let's say a bottle of Dr.Wells (an actual soft drink still available but hard to obtain)cost $0.15 in 1970.If the consumer price index (CPI)in 1970 was 37.8 and the current CPI is 240,then the inflation-adjusted price of Dr.Wells would be (rounded to the nearest penny)
A) $0.0236.
B) $2.36.
C) about a dollar.
D) $0.95
E) $95.00.

Question

Quizplus · Accepted Answer

To adjust for inflation, we need to use the formula:
Adjusted Price = (Price in Base Year) x (Current CPI / Base Year CPI)
Using the given information, we have:
Adjusted Price = $0.15 x (240/37.8) = $0.95
Therefore, the inflation-adjusted price of Dr. Wells is $0.95, which is closest to answer choice D.

Let's Say a Bottle of Dr