Commodity: Wheat

To calculate the price index number for the commodity "Wheat" using the method of relatives with the arithmetic mean, we need to follow the given rules and steps:

Step 1: Gather Data
First, we need to gather the necessary data related to the prices of wheat over a given period. This data should include the prices of wheat for different years or time periods.

Step 2: Calculate Relative Prices
Next, we calculate the relative prices of wheat for each year or time period by dividing the price of wheat for that year by the price of wheat for the base year (usually taken as 100).

Step 3: Calculate Arithmetic Mean
After obtaining the relative prices for each year, we calculate the arithmetic mean of these relative prices. The arithmetic mean is calculated by adding up all the relative prices and dividing the sum by the total number of years or time periods.

Step 4: Calculate Price Index Number
Finally, we calculate the price index number for wheat by multiplying the arithmetic mean by 100. This will give us the price index number for wheat, which represents the average price change of wheat over the given period compared to the base year.

Example:
Let's assume we have the following data for wheat prices:

Year | Price of Wheat
---------------------
2018 | $10
2019 | $12
2020 | $15

Step 1: Gather Data
We have gathered the data on wheat prices for the years 2018, 2019, and 2020.

Step 2: Calculate Relative Prices
To calculate the relative prices, we divide each year's price by the base year's price. Let's assume the base year is 2018.

Relative price for 2018 = 10/10 = 1
Relative price for 2019 = 12/10 = 1.2
Relative price for 2020 = 15/10 = 1.5

Step 3: Calculate Arithmetic Mean
To calculate the arithmetic mean, we add up all the relative prices and divide by the total number of years.

Arithmetic mean = (1 + 1.2 + 1.5)/3 = 1.2333

Step 4: Calculate Price Index Number
Finally, we multiply the arithmetic mean by 100 to calculate the price index number.

Price index number = 1.2333 * 100 = 123.33

Therefore, the price index number for the commodity "Wheat" using the method of relatives with the arithmetic mean is 123.33. This indicates that the average price change of wheat over the given period compared to the base year is 123.33%.