Question

Find out index value by the Price Relative Method for the year 2017 from the following data:

Items	A	B	C	D	E	F	G
2004 Price (₹)	100	10	5	4	1	2	3
2017 Price (₹)	100	9	4	2	1	2.50	2.25

Answer 1

Items	2004 Price (P0)	2014 Price (P1)	Price relative $=\frac{{\mathit{P}}_{\mathbf{1}}}{{\mathit{P}}_{\mathbf{0}}}\mathbf{\times }\mathbf{100}$
A	100	100	$\frac{100}{100}\times 100=100$
B	10	9	$\frac{9}{10}\times 100=90$
C	5	4	$\frac{4}{5}\times 100=80$
D	4	2	$\frac{2}{4}\times 100=50$
E	1	1	$\frac{1}{1}\times 100=100$
F	2	2.50	$\frac{2.50}{2}\times 100=125$
G	3	2.25	$\frac{2.25}{3}\times 100=75$
N = 7			$\mathrm{\Sigma }\left(\frac{P_1}{P_0}\times 100\right)=620$

$$\begin{gathered} P_{01}=\frac{\mathrm{\Sigma }\left({\displaystyle \frac{{\mathrm{P}}_1}{{\mathrm{P}}_0}}\times 100\right)}{\mathrm{N}} \\ \mathrm{or},P_{01}=\frac{620}{7}=88.57 \end{gathered}$$

Hence, Price Index = 88.57