The price relative is computed by dividing
A) a base-period unit price by a current unit price and multiplying the result by 100.
B) a current unit price by a base-period unit price and multiplying the result by 100.
C) a current unit price by a base-period unit price and dividing the result by 100.
D) current price by quantity.

Question

Quizplus · Accepted Answer

The price relative is a measure of price change over time, and it is computed by dividing a current unit price by a base-period unit price and multiplying the result by 100. This formula expresses the current price as a percentage of the base-period price, making it easy to compare price changes over time. Choice A incorrectly reverses the order of division, and choice C incorrectly divides the result by 100. Choice D is not a formula for calculating price relative.

The Price Relative Is Computed by Dividing