Real price and how to calculate real prices?, Microeconomics

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REAL VERSUS NOMINAL PRICES

Nominal price is a complete or current dollar price of a good or service when it is sold.

Real price is the price related to a combined measure of prices or stable dollar price.

The Consumer Price Index (CPI) is a cumulative measure. Real prices are emphasized to allow the evaluation of relative prices.

Calculating Real Prices

 

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Calculating the Real Price of Milk

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Calculating Real Prices: An Example - Eggs & College

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