Question

Find out the price index of the year 2008, assuming 2006 as the base year of the following data by using simple average of price relatives method:

$\begin{array}{ccc}\text{Commodity}& \text{Price in the year,2006}& \text{Price in the year,2008}\\ & \text{(Rs) Per Qtl.}& \text{(Rs) Per Qtl.}\\ \text{Wheat}& 800& 900\\ \text{Sugar}& 1100& 1200\\ \text{Rice}& 400& 600\\ \text{Potato}& 500& 700\\ \text{Salt}& 300& 500\end{array}$

Answer 1

$\begin{array}{cccc}\text{Commodity}& P_0& P_1& \frac{P_1}{P_0}\times 100\\ \text{Wheat}& 800& 900& 112.50\\ \text{Sugar}& 1100& 1200& 109.09\\ \text{Rice}& 400& 600& 150.00\\ \text{Potato}& 500& 700& 140.00\\ \text{Salt}& 300& 500& 166.67\\ & & & \sum (\frac{P_1}{P_0}\times 100)=678.26\end{array}$

$P_{01}=\frac{\sum (\frac{P_1}{P_0}\times 100)}{N}=\frac{678.26}{5}\times 100=135.652$