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Solve the following problem : Calculate Marshall-Edgeworth’s Price Index Number for the following data.

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Question

Solve the following problem :

Calculate Marshall-Edgeworth’s Price Index Number for the following data.

Commodity Base Year Current Year
  Price
p0
Quantity
q0
Price
p1
Quantity
q1
X 12 35 15 25
Y 29 50 30 70
Sum
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Solution

Commodity Base Year Current Year q0 + q1 p0
(q0 + q1)
p1
{q0 + q1)
  p0 q0 p1 q1      
X 12 35 15 25 60 720 900
Y 29 50 30 70 120 3480 3600
Total 4200 4500

From the table,
`sum"p"_0("q"_0 + "q"_1) = 4,200, sum"p"_1("q"_0 + "q"_1) = 4500`

Marshall-Edgeworth’s Price Index Number:

P01(M–E) = `(sum"p"_1("q"_0 + "q"_1))/(sum"p"_0("q"_0 + "q"_1)) xx 100`

= `(4500)/(4200) xx 100`

= 107.14

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Construction of Index Numbers - Weighted Aggregate Method
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Chapter 5: Index Numbers - Miscellaneous Exercise 5 [Page 92]

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Balbharati Mathematics and Statistics 2 (Commerce) [English] Standard 12 Maharashtra State Board
Chapter 5 Index Numbers
Miscellaneous Exercise 5 | Q 4.07 | Page 92

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