Question

From the following data compute 

(i) Fisher’s Price Index number 

(ii) Marshall-Edgeworth’s Price Index number. Also show that Fisher’s Price Index number satisfies TRT.

Answer 1

Fisher’s Price Index number

Marshall-Edgeworth’s Price Index number

For Fisher’s: T.R.T = P₀₁ × P₁₀ = 1 (Expect the factor 100)