What are the two types of price variation?
The two types of price variation are relative price variation and absolute price variation. Relative price variation refers to changes in the price of a particular good or service relative to the prices of other goods or services, while absolute price variation refers to changes in the actual monetary value of a good or service. Relative price variation is often used to understand consumer preferences and market dynamics, while absolute price variation is used to analyze inflation and economic trends. Both types of price variation play a crucial role in the functioning of markets and economies.
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