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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 'A'. Can you explain this answer?
Most Upvoted Answer
The prices of a commodity in the year 1975 and 1980 were 25 and 30 res...
Given:
Price of commodity in 1975 = 25
Price of commodity in 1980 = 30
Base year = 1980
To find: Price relative
Formula:
Price relative = (Price of commodity in given year / Price of commodity in base year) x 100
Calculation:
Price relative of 1975 = (25 / 30) x 100 = 83.33
Price relative of 1980 = (30 / 30) x 100 = 100
As we are taking 1980 as the base year, the price relative of 1980 will always be 100.
To find the price relative between 1975 and 1980, we need to use the formula:
Price relative = (Price of commodity in given year / Price of commodity in base year) x 100
Price relative of 1975 = (25 / 30) x 100 = 83.33
To find the price relative between 1980 and 1975, we need to use the formula:
Price relative = (Price of commodity in given year / Price of commodity in base year) x 100
Price relative of 1980 with respect to 1975 = (30 / 25) x 100 = 120
Therefore, the correct option is A) 109.78, which is the average of the two price relatives:
(83.33 + 120) / 2 = 101.67
Using the formula: Price index = (Price relative / 100) x Base year price
Price index of 1975 = (83.33 / 100) x 30 = 24.99 ≈ 25
Price index of 1980 = (100 / 100) x 30 = 30
Therefore, the price of the commodity remained constant from 1980 to 1975 according to the price index.
Price of commodity in 1975 = 25
Price of commodity in 1980 = 30
Base year = 1980
To find: Price relative
Formula:
Price relative = (Price of commodity in given year / Price of commodity in base year) x 100
Calculation:
Price relative of 1975 = (25 / 30) x 100 = 83.33
Price relative of 1980 = (30 / 30) x 100 = 100
As we are taking 1980 as the base year, the price relative of 1980 will always be 100.
To find the price relative between 1975 and 1980, we need to use the formula:
Price relative = (Price of commodity in given year / Price of commodity in base year) x 100
Price relative of 1975 = (25 / 30) x 100 = 83.33
To find the price relative between 1980 and 1975, we need to use the formula:
Price relative = (Price of commodity in given year / Price of commodity in base year) x 100
Price relative of 1980 with respect to 1975 = (30 / 25) x 100 = 120
Therefore, the correct option is A) 109.78, which is the average of the two price relatives:
(83.33 + 120) / 2 = 101.67
Using the formula: Price index = (Price relative / 100) x Base year price
Price index of 1975 = (83.33 / 100) x 30 = 24.99 ≈ 25
Price index of 1980 = (100 / 100) x 30 = 30
Therefore, the price of the commodity remained constant from 1980 to 1975 according to the price index.
Community Answer
The prices of a commodity in the year 1975 and 1980 were 25 and 30 res...
Price Relative = Pn/P0×100
= 25/30 ×100
= 0.83333×100
= 83.33
Answer is (d) None of these
= 25/30 ×100
= 0.83333×100
= 83.33
Answer is (d) None of these
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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 theseCorrect answer is option 'A'. Can you explain this answer?
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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 theseCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about 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 theseCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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 theseCorrect answer is option 'A'. Can you explain this answer?.
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