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11 February, 14:27

In her school's food court, Molly notices that a carton of juice costs $1.75 and a can of soda costs $1.25. Since Molly just finished studying for an economics exam, she immediately calculates that the relative price of a carton of juice is per. Suppose that school administrators want to encourage healthy choices and decide to impose a $0.25 price increase on cans of soda. Given that the absolute price of a carton of juice is unchanged, the relative price of a carton of juice.

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  1. 11 February, 14:56
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    The computation is shown below:

    Relative price of a carton of juice = Cost of carton of juice : Cost of can of soda

    = $1.75 : $1.25

    = 1.4

    And, the relative price of a carton of juice if the absolute price of a carton of juice is unchanged

    Relative price of a carton of juice = Cost of carton of juice : Cost of can of soda

    = $1.75 : $1.50

    = 1.167

    Therefore, the relative price is decreased
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