The correct answer is A. price index.
A price index is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is a statistical measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
A cost index is a measure of the average change over time in the prices of goods and services used in production. It is a statistical measure of the average change over time in the prices of goods and services used in production.
A profit index is a measure of the average change over time in the profits of businesses. It is a statistical measure of the average change over time in the profits of businesses.
A cost driver index is a measure of the average change over time in the costs of production. It is a statistical measure of the average change over time in the costs of production.
In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through price index. This is because the price index measures the average change over time in the prices of goods and services, which includes the effects of inflation. By dividing cost through the price index, we are removing the effects of inflation from the cost, and are left with the real cost.