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Question
If Laspeyre’s and Dorbish’s Price Index Numbers are 150.2 and 152.8 respectively, find Paasche’s Price Index Number.
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Solution
Given, P01(L) = 150.2, P01(D-B) = 152.8
Dorbish-Bowley’s Price Index Number:
P01(D-B) = `("P"_01("L") + "P"_01("P"))/(2)`
∴ 152.8 = `(150.2 + "P"_01("P"))/(2)`
∴ 305.6 = 150.2 6 + P01(P)
∴ P01(P) = 305.6 – 150.2 = 155.4
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| Commodity | Base Year | Current Year | ||
| Price p0 |
Quantity q0 |
Price p1 |
Quantity q1 |
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| I | 8 | 30 | 12 | 25 |
| II | 10 | 42 | 20 | 16 |
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| II | 10 | 42 | 20 | 16 | 840 | 420 | 320 | 160 |
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Paasche 's Price Index Number:
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∴ P01(P) = `square`
