Question

Calculate the price index number for the given data.

Commodity	A	B
Price in 2020 (₹)	20	30
Price in 2021 (₹)	40	40

Answer 1

Commodity	Price in 2020 (₹) (Base Year) P0	Price in 2021 (₹) (Current Year) P1
A	20	40
B	30	40
Total	∑p0 = 50	∑p1 =  80

Price Index Number `"P"_{01} = (sum"P"_1)/(sum"P"_0) xx 100`

∴ `"P"_{01} = 80/50 xx 100`

∴ `"P"_{01} = 160`

∴ Price Index Number = 160