Not a problem but I looked at google translate and they gave "overpriced". "Too expensive" implies that I can't afford it, while "overpriced" implies I can afford it, but it is not worth what the vendor is asking for it. No idea how an Italian speaker would take it.
I accidentally typed in "It's absolutely too much" without thinking, this should be accepted I think, although not a literal translation, this is what I would pretty much always say in English, I rarely would say "too expensive."
Because you would never say too much expensive but you would say too expensive. I have some quibble wiht absolutely too expensive becuase i dont think we'd say that either but i guess they do in italian and this is the closest translation.
Yes caro is dear (expensive) and costoso equates to costly. a literal translation of caro is dear as a term of endearment and expensive just like in english. there is a song called caro nome meaing dear name. And another one caro mio ben - my dear something or other.
Re 'caro': When will Duolingo realise that 'pricey' is vulgar slang. It won't accept 'dear', which is the best translation. It will accept 'expensive', but that takes longer to type. PLEASE enter 'dear' as a good (and indeed the best) translation of 'caro' (in both senses).