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If the price of all commodities in a place have increased 1.25 times in comparison to the base period prices, then the index number of prices for the place is now

  • a)
    100

  • b)
    125

  • c)
    225

  • d)
    None of the above.

Correct answer is option 'C'. Can you explain this answer?
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Explanation:

To calculate the index number of prices for the place, we need to compare the current prices with the base period prices.

Let's assume the base period price of a commodity is P.
According to the question, the current price of the same commodity is 125P (increased 125 times).

Calculation:
To calculate the index number, we use the formula:
Index Number = (Current Price / Base Period Price) * 100

Substituting the values:
Index Number = (125P / P) * 100
Index Number = 125 * 100
Index Number = 12,500

Therefore, the index number of prices for the place is now 12,500.

Answer:
The correct option is d) None of the above.
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If the price of all commodities in a place have increased 1.25 times in comparison to the base period prices, then the index number of prices for the place is nowa)100b)125c)225d)None of the above.Correct answer is option 'C'. Can you explain this answer?
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