1. What is Price Ratio?

The price ratio compares the value of two items by dividing one price by another. It's a simple way to determine how many times more (or less) expensive one item is compared to another.

2. How Does the Calculator Work?

The calculator uses the price ratio formula:

Where:

• \( Price1 \) — First item's price (in any currency)
• \( Price2 \) — Second item's price (in same currency)

Explanation: The ratio shows how many units of Price2 are equivalent to one unit of Price1. A ratio greater than 1 means Price1 is more expensive, while a ratio less than 1 means Price2 is more expensive.

3. Importance of Price Ratio

Details: Price ratios are fundamental in economics, finance, and everyday shopping decisions. They help compare product values, assess purchasing power parity between currencies, and evaluate investment opportunities.

4. Using the Calculator

Tips: Enter both prices in the same currency. The calculator will show the ratio of Price1 to Price2. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What does a price ratio of 1.5 mean?
A: It means Price1 is 1.5 times the price of Price2, or Price1 is 50% more expensive than Price2.

Q2: Can I compare prices in different currencies?
A: Yes, but first convert both prices to the same currency using current exchange rates.

Q3: How is price ratio different from percentage difference?
A: Price ratio shows the multiplicative difference (1.5x), while percentage difference shows additive difference (50% more).

Q4: What's a good price ratio when comparing products?
A: It depends on what you're comparing. Lower ratios (closer to 1) indicate more similar pricing, but value depends on product quality and features.

Q5: Can price ratio be less than 1?
A: Yes, a ratio less than 1 means Price1 is cheaper than Price2. For example, 0.8 means Price1 is 80% of Price2.