Question

Use the data given in the table to calculate the Price Index using Laspeyres Formula.

Item	P0	Q0	P1	Q1
X	8	3	5	4
Y	9	5	6	4
Z	12	4	10	6

1. 137.6
2. 72.65
3. 122.3
4. 81.7

Answer 1

Correct Answer - Option 2 : 72.65

 Formula

Laspeyres index = ∑(p₁q_o/∑p_oq_o) ×100

Calculation

∑p₁q_o = 15 + 30+ 40

⇒ 85

∑p_oq_o = 24 + 45 + 48

⇒ 117

⇒ Price index = (85/117) × 100

∴The Price Index using Laspeyres Formula is 72.65