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The prices of a commodity in the year 1975 and 1980 were 25 and 30 respectively taking 1980 as base year the price relative is:
- a)109. 78
- b)110.25
- c)113.25
- d)None of these.
Correct answer is option 'D'. Can you explain this answer?
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The prices of a commodity in the year 1975 and 1980 were 25 and 30 res...
Price Relative Calculation:
To calculate the price relative, we need to compare the prices of the commodity in the given years to the base year (1980).
Price relative formula: (Price in the given year / Price in the base year) * 100
Let's calculate the price relative for the years 1975 and 1980:
1. Price Relative for 1975:
Price in 1975 = 25
Price in base year (1980) = 30
Price relative (1975) = (25 / 30) * 100 = 83.33
2. Price Relative for 1980:
Price in 1980 = 30
Price in base year (1980) = 30
Price relative (1980) = (30 / 30) * 100 = 100
Since the base year always has a price relative of 100, we can ignore it for comparison purposes.
Comparison of Price Relatives:
Now, let's compare the price relative for the given years:
Price relative (1975) = 83.33
Price relative (1980) = 100
Since the base year (1980) has a price relative of 100, the price relative for 1975 can be considered as a percentage increase or decrease from the base year.
In this case, the price relative for 1975 (83.33) indicates that the price of the commodity decreased by 16.67% compared to the base year (1980).
Therefore, the correct answer is option 'D', None of these, as none of the given options represents the correct price relative.
To calculate the price relative, we need to compare the prices of the commodity in the given years to the base year (1980).
Price relative formula: (Price in the given year / Price in the base year) * 100
Let's calculate the price relative for the years 1975 and 1980:
1. Price Relative for 1975:
Price in 1975 = 25
Price in base year (1980) = 30
Price relative (1975) = (25 / 30) * 100 = 83.33
2. Price Relative for 1980:
Price in 1980 = 30
Price in base year (1980) = 30
Price relative (1980) = (30 / 30) * 100 = 100
Since the base year always has a price relative of 100, we can ignore it for comparison purposes.
Comparison of Price Relatives:
Now, let's compare the price relative for the given years:
Price relative (1975) = 83.33
Price relative (1980) = 100
Since the base year (1980) has a price relative of 100, the price relative for 1975 can be considered as a percentage increase or decrease from the base year.
In this case, the price relative for 1975 (83.33) indicates that the price of the commodity decreased by 16.67% compared to the base year (1980).
Therefore, the correct answer is option 'D', None of these, as none of the given options represents the correct price relative.
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The prices of a commodity in the year 1975 and 1980 were 25 and 30 respectively taking 1980 as base year the price relative is:a)109. 78b)110.25c)113.25d)None of these.Correct answer is option 'D'. Can you explain this answer?
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