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Sum

**Solve the following problem :**

Given that Laspeyre’s and Paasche’s Price Index Numbers are 25 and 16 respectively, find Dorbish-Bowley’s and Fisher’s Price Index Number.

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#### Solution

Given, P_{01}(L) = 25, P_{01}(P) = 16

Dorbish-Bowley’s Price Index Number:

P_{01}(D–B) = `("P"_01("L") + "P"_01("P"))/(2)`

= (25 + 16)/(2)`

= `(41)/(2)`

= 20.5

Fisher’s Price Index Number:

P_{01}(F) = `sqrt("P"_01("L") xx "P"_01("P"))`

= `sqrt(25 xx 16)`

= `sqrt(400)`

= 20

Concept: Construction of Index Numbers - Weighted Aggregate Method

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