South African exchange rate.. plz help?

Question

for example, if a bottle of coke in britain is £1.. how much would it be in south africa? i no that about 14 rand is a pound but would the coke be a pound but in rand money or would it be more expensive or cheaper? i cant really explainmyself very well. basically, is everything cheaper in south africa than britain, or is it cheaper.. thanks

Answer 1

I know what you mean. . .one cannot directly convert the price.  However, since the salaries and standard of living in SA is less than in Britain, the cost of production will be less and proportionally the item cost will be less per capita earnings than in Britain.  Other factors that will influence the price is supply and demand and the cost of production (COP).

Therefore I must say it is going to be cheaper. . .also think of prices as, 'Whatever the market will bear'.  In the case of SA with limited income by the majority of the population, prices are based on volume sales at Cost + Minimal Gross Margin.  

Are you studying Marketing or Economics?