Question

As per the given data, Laspeyres price index for the year 2006 is:

Commodities	Quantities		Price per unit
	2005	2006	2005	2006
A	3	5	2.0	2.5
B	4	6	2.5	3.0
C	2	3	3.0	2.5

1. 121.36
2. 101.36
3. 111.36
4. 100.36

Answer 1

Correct Answer - Option 3 : 111.36

Given

Commodities	Quantities		Price per unit
	2005(QO)	2006(Q1)	2005(P0)	2006 (P1)
A	3	5	2.0	2.5
B	4	6	2.5	3.0
C	2	3	3.0	2.5

Formula

Laspeyres price index = (∑p₁q_o/∑p₀q₀) × 100

P₁ = current year

P₀ = base year

q₀ =  base quantity

Calculation

Laspeyres price index for year 2006

⇒ (3 × 2.5 + 4 × 3.0 + 2 × 2.5)/(3 × 2 + 4 × 2.5 + 2 × 3.0) × 100

⇒ (7.5 + 12 + 5)/(6 + 10 + 6) × 100

⇒ (24.5/22) × 100

∴ Laspeyres price index for year 2006 is 111.36