I'm not sure I totally understand the question. Do you mean how do you calculate it? Or do you mean like why does it work or how does it help? I'm not sure exactly which way you mean. So I will answer both. 1. To price an item economically in Monero, simply take the amount of fiat that that item costs, add any kind of shipping and government sales extortion, etc., that has to be paid on top of it, and then divide that by the Monero simple moving average, whichever you prefer. I like the one year, for example. That way you're not constantly dealing with the fluctuations in the Monero price. 2. If you mean how does it help pricing items directly in Monero, then it keeps exchange traders from being able to push Monero's price too far upwards or downwards before it snaps back towards the moving average. Think of it like a bungee cord. It only stretches so far before it snaps back, and by pricing items directly in Monero, you cause that stretch to be less before that snapback occurs.