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Worked Examples · Example 9
Q.

For three commodities A, B and C, the base-year price and quantity, and the current-year price, are given below. Calculate the Price Index Number by Laspeyres' Method.

Commodityp₀q₀p₁
A10512
B20325
C30233
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Step 1 — Base-year value, p₀q₀, for each commodity.

A:10×5=50,B:20×3=60,C:30×2=60A: 10\times5=50,\quad B: 20\times3=60,\quad C: 30\times2=60

Σp0q0=50+60+60=170\Sigma p_0q_0 = 50+60+60 = 170

Step 2 — Current price × base-year quantity, p₁q₀, for each commodity.

A:12×5=60,B:25×3=75,C:33×2=66A: 12\times5=60,\quad B: 25\times3=75,\quad C: 33\times2=66

Σp1q0=60+75+66=201\Sigma p_1q_0 = 60+75+66 = 201

Step 3 — Laspeyres' Price Index. …

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