In simple aggregative method of constructing index numbers, price index can be given as $P_{01}=\frac{\sum P_1}{\sum P_o} \times 100$
What does $\sum P_O$ represent?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Sum of prices of all items in base year
$P_{01} = \frac{\sum P_1}{\sum P_0} \times 100$
$\sum P_0 \text{ represents sum of prices in the base year}$
$\sum P_0 = \text{Sum of prices of all items in base year}$