Question

Construct an index for the year 2016 taking 2011 as base by simple average of price relatives method

Items	P	Q	R	S
Price (in ₹)	30	50	70	90
Price (in ₹)	40	60	80	100

Answer 1

Items	Price in 2011 (P0)	Price in 2016 (P1)	Price Relative= $\frac{p_1}{p_0}\times 100$
P	30	40	133.33
Q	50	60	120
R	70	80	114.29
S	90	100	111.11
			$\mathrm{\Sigma }\left(\frac{p_1}{p_0}\times 100\right)=478.73$

Simple Average of Price Relatives

$P_{01}=\frac{\mathrm{\Sigma }\left({\displaystyle \frac{p_1}{p_0}}\times 100\right)}{N}=\frac{478.73}{4}=119.68$