Skip to content
Exercises · Q10
Q.

Compute Laspeyre's and Paasche's price index numbers for the following data.

Commodityp0p_0q0q_0p1p_1q1q_1
A4567
B6485
C5664
Maharashtra MsbshseTextbookSubjectiveImportance★★★★★
6% · 2/35 Questions
✓ Free question

Build the products table:

Commodityp0p_0q0q_0p1p_1q1q_1p0q0p_0q_0p1q0p_1q_0p0q1p_0q_1p1q1p_1q_1
A456720302842
B648524323040
C566430362024
Total749878106

Laspeyre's index:

P01L=∑p1q0∑p0q0×100=9874×100=1.32432×100=132.43.P_{01}^{L} = \frac{\sum p_1 q_0}{\sum p_0 q_0}\times100 = \frac{98}{74}\times100 = 1.32432\times100 = 132.43.

Paasche's index:

P01P=∑p1q1∑p0q1×100=10678×100=1.35897×100=135.90.P_{01}^{P} = \frac{\sum p_1 q_1}{\sum p_0 q_1}\times100 = \frac{106}{78}\times100 = 1.35897\times100 = 135.90.

Independent check. p0q0:20+24+30=74p_0q_0: 20+24+30=74; p1q0:30+32+36=98p_1q_0: 30+32+36=98; p0q1:28+30+20=78p_0q_1: 28+30+20=78; p1q1:42+40+24=106p_1q_1: 42+40+24=106. All confirm.

✓Final answer

P01L≈132.43P_{01}^{L} \approx 132.43; P01P≈135.90P_{01}^{P} \approx 135.90.

Unlock everything free for 14 days

  • Full step-by-step solutions
  • Concept-first explanations
  • Methods, shortcuts & mistakes
  • PYQ mapping + timed mock tests

Full access for 14 days. No credit card required.