From the following compute price index b

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Target Exam

CUET

Subject

-- Applied Mathematics - Section B2

Chapter

Index Numbers and Time Based Data

Question:

From the following compute price index by using simple average of price relatives:

Options:

103.94

106.94

104.94

105.94

Correct Answer:

105.94

Explanation:

The correct answer is option (4) : 105.94

Price in 2009 (₹) = Base price $(p_0)$

Price in 2010 (₹) = Current price $(p_1)$

Kindly draw full table.

Price relative $\frac{p_1}{p_0}×100$

$\frac{21}{20}×100=105$

$\frac{14}{15}×100=93.33$

$\frac{3}{3}×100=100$

$\frac{2.80}{2.80}×100=100$

$\frac{8}{6}×100=133.33$

$\frac{260}{250}×100=104$

$∑\frac{p_1}{p_0}×100=635.66$

Hence, Required Price Index

$P_{01}=\frac{1}{N}\left(∑\frac{p_1}{p_0}×100\right)$

$=\frac{635.66}{6}=105.94$