PE ratio net, him, question, relative, industry

mkytz15

An interviewer asked me what PE ratio is, i was able to give the formula: MPS/EPS
and a simple reply: " it means how much investor are willing to pay for the company's net earning per share"

The next question he posted " So is high PE ratio better or low PE ratio better because i have heard that low PE could be an indication the stock is cheap relative to the industry average?"

My reply: ----I just stared at him ...lol

Can anyone help to solve this question?