To help a firm achieve a competitive advantage, each distinct activity performed in the value chain needs to either add incremental value to the product/service or lower its relative cost.
Relative price is the price of a good, such as one good or service, relative to another good or service; i.e. the ratio of two prices. Relative prices can be expressed as the ratio between the prices of any two goods or the ratio between the prices of one good and the prices of a basket of goods (weighted average of the prices of all other available goods). on the market ) . Microeconomics can be thought of as the study of how economic agents respond to changes in relative prices and how relative prices are affected by the behavior of these agents. Differences and changes in relative prices can also reflect changes in productivity.
In the demand equation {\displaystyle Q = f(P)} {\displaystyle Q = f(P)} (where {\displaystyle Q} Q is the number of units of a good or a service requested' ), { \displaystyle P} P is the relative price of the good or service, not the nominal price. It is a change in the relative price level that causes a change in the quantity demanded.
Learn more about Relative Cost here: https://brainly.com/question/5168855
#SPJ4
