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If now the prices of all the commodities in a place have been decreased by 85% over the base period prices, then the index number of prices for the place is now (index number of prices of base period = 100)
  • a)
    100
  • b)
    135
  • c)
    65
  • d)
    None of these
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
If now the prices of all the commodities in a place have been decrease...
Explanation:

First, let's understand what an index number is. It is a statistical measure that shows changes in a variable or group of variables over time. In this case, the variable is prices of commodities in a place.

Given information: The prices of all the commodities in a place have been decreased by 85% over the base period prices.

To calculate the index number of prices for the place, we need to use the following formula:

Index number = (Current period prices / Base period prices) x 100

Here, the base period prices are given as 100 (as per the question).

Let's assume that the current period prices are P.

Using the given information, we know that the current period prices have decreased by 85% over the base period prices. Mathematically, we can represent this as:

P = (100 - 85)% of 100
P = (15/100) x 100
P = 15

Therefore, the current period prices are 15.

Now, we can calculate the index number using the formula:

Index number = (15 / 100) x 100
Index number = 15

Hence, the index number of prices for the place is 15, which is not one of the given options. Therefore, the correct answer is 'None of these.'
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Community Answer
If now the prices of all the commodities in a place have been decrease...
If the base year prices are ₹100.
Then they decrease by 85% i.e.₹85
So new prices will be ₹100-₹85=₹15

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If now the prices of all the commodities in a place have been decreased by 85% over the base period prices, then the index number of prices for the place is now (index number of prices of base period = 100)a)100b)135c)65d)None of theseCorrect answer is option 'D'. Can you explain this answer?
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