Sellrate is a multiplier for the price of the item that the merchant will sell. So, if a merchant is selling something with a price of 10000 (10 plat), and the sellrate is 1, the cost to buy it would be about 1 plat. But, if that same item had the sellrate changed to 15, the cost to buy it would now be 10 plat X 15 = about 150 plat (give or take depending on bonuses like CHA and Faction). You can also make the sellrate lower than the price by setting it to something like 0.5, where the item would then cost about half of what it sold to the merchant for (in this case, about 5 plat). You never want to set sellrate below 1 for this reason; so you don't run into issues where things are worth more to sell than they cost to buy.
Also, sellrate only affects how much an item costs from a merchant. It does not affect how much the merchant will buy the item for. So, you can have something cost 50 times what the merchant will pay for it if you wanted (by setting sellrate to 50).
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