Q.From the following data on four commodities, calculate the Price Index Number for the current year using the Simple Aggregate Method (base year = 100): Commodity A — base year price ₹10, current year price ₹12; Commodity B — base year price ₹20, current year price ₹25; Commodity C — base year price ₹15, current year price ₹18; Commodity D — base year price ₹25, current year price ₹30.

The Simple Aggregate Method just totals all the base-year prices and all the current-year prices, then compares the two totals. …

$P_{01} = \frac{\sum P_1}{\sum P_0}\times 100 = \frac{85}{70}\times 100 = 121.43$ …

Sum all current-year prices; sum all base-year prices; divide the current total by …

Averaging the individual (P1−P0) differences instead of the correct ratio-of-totals formula — the Simple Aggregate Method specifically works with the TOTALS of P …