Given that \(p_0\) and \(p_1\) represent base and current prices of a commodity, \(q_0\) and \(q_1\) refer to the base and current quantities, then the formula used to calculate price relatives is :
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → \(\displaystyle\frac{p_1}{p_0}\times 100\)
A price relative compares the current price of a commodity with its base price, expressed as a percentage:
\( \displaystyle \text{Price relative} = \frac{p_1}{p_0}\times 100 \)
It uses prices only; quantities do not enter it.
Why the other options are incorrect
Option (2) \(\frac{p_1q_1}{p_0q_0}\times 100\) — Incorrect. This compares the values (price × quantity) of the two years: it is the value relative, not the price relative.
Option (3) \(\frac{q_0}{q_1}\times 100\) — Incorrect. It uses quantities, not prices, and has the base value on top.
Option (4) \(\sqrt{p_0p_1}\) — Incorrect. This is the geometric mean of the two prices, a price, not a relative comparing them.
Note: This topic was not in the CUET 2026 syllabus.