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4 Examples of Relative Price

 , updated on December 01, 2017
Relative price is the price of something compared to something else. In other words, it is the ratio of two prices. Completely logical people will make purchasing decisions by considering the relative prices of their options. The following are illustrative examples.

Products

In apple season, apples cost half as much as oranges. In orange season, oranges cost half as much as apples.

Services

A local carpenter with high ratings and stellar recommendations costs 35% more than a carpenter with mediocre ratings that includes a few complaints.

Entertainment

A night out at the movies costs 1/4 the price of a night at the opera.

Investing

A stock with a price-to-book ratio of 2 might look cheap in a market where the average price-to-book is 3. However, if the average price-to-book drops to 0.66 a price-to-book of 2 may start to look expensive.
Overview: Relative Price
Type
Definition (1)
The price of something compared to something else.
Definition (2)
The price of something compared to all available alternatives and substitutions.
Related Concepts

Pricing

This is the complete list of articles we have written about pricing.
Algorithmic Pricing
Bargaining Power
Benchmark Price
Commoditization
Price Fixing
Cost-plus Pricing
Equilibrium
Price Gouging
Customary Pricing
Decoy Effect
Everyday Low Price
Marginal Utility
Willingness To Pay
Dynamic Pricing
High-Low Pricing
Market Value
Flat Pricing
Loss Leader
Predatory Pricing
Price Discrimination
Snob Effect
Market Price
Price Competition
Price Leadership
Premium Pricing
Price Economics
Price War
Revenue Management
Veblen Goods
Price Floor
Price Promotion
Price Sensitivity
Price Skimming
Price Umbrella
Pricing Power
Pricing Strategy
Sticky Prices
Value For Money
More ...
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Price Economics

A list of price economics principles and theories.

Willingness To Pay

A list of factors that influence willingness to pay.

Sticky Prices

Prices that stick to an established range and resist changing economic forces such as inflation.

Commoditization

A definition of commoditization with examples.

Too Cheap To Meter

A definition of too cheap to meter with examples.

Dumping

An overview of dumping with an example.

Value vs Price

The difference between value and price with examples.

Market Value

The definition of market value with examples.

Competitive Market

A complete overview of competitive markets with examples.

Pricing Strategy

An overview of common pricing strategies.

Price Discrimination

A list of price discrimination strategies.

Price War

An overview of price wars.

Premium Pricing

A definition of premium pricing with examples.

Penetration Pricing

A definition of penetration pricing with examples.

Variable Pricing

The definition of variable pricing with examples.

Channel Pricing

A definition of channel pricing with examples.

Supply And Demand

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Value Pricing

The definition of value pricing with examples.
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