Question

Using simple aggregate method, calculate price index number from the following data:

Commodity	A	B	C	D
Price in 1997	90	40	90	30
Price in 1998	95	60	110	35

• A. 110
• B. 120
• C. 130
• D. 140

Answer 1

The correct option is B 120

$Commodity$	$Pricein1997$ $P_0$	$Pricein1998$ $P_1$
$A$	$90$	$95$
$B$	$40$	$60$
$C$	$90$	$110$
$D$	$30$	$35$
$Total$	$\sum P_0=250$	$\sum P_1=300$

$\Rightarrow$ Price index number $\left(P_{01}\right)$ = $\frac{\sum P_1}{\sum P_0}\times 100=\frac{300}{250}\times =120$