Question

Calculate the price index no by: (a) Laspeyre's method (b) Paasche's method:

Answer 1

$\left(i\right)\text{Laspeyre's method}{P}_{01}=\frac{\sum P_1{Q}_0}{\sum P_0{Q}_0}\times 100=\frac{535}{381}\times 100=140.42\left(ii\right)\text{Paasche's method}{P}_{01}=\frac{\sum P_1{Q}_1}{\sum P_0{Q}_1}\times 100=\frac{570}{408}\times 100=139.70$