If p1 = Price in the current year, q1 = quantity in the current yea

1.	If p1 = Price in the current year, q1 = quantity in the current year, po = price in the base year, q0 = quantity in the base year, the formula of Laspeyres Price index is given as:1. \(\frac{∑_{p_1q_0}}{∑_{p_0q_0}}\)2. \(\frac{∑_{p_0q_1}}{∑_{p_1q_0}}\)3. \(\frac{∑_{p_0q_0}}{∑_{p_1q_1}}\)4. \(\frac{∑_{p_1q_0}}{∑_{p_0q_1}}\)
Answer» Correct Answer - Option 1 : \(\frac{∑_{p_1q_0}}{∑_{p_0q_0}}\) Laspeyres Method: 1. The Laspeyres Price Index is a weighted aggregate price index, where the weights are determined by quantities in the base period. 2. The formula for constructing the index is: \(P_{01}=\frac{∑_{p_1q_0}}{∑_{p_0q_0}}\times100\) Steps for calculating Laspeyres Price Index: Step 1: Multiply the current year prices of various commodities with base year weights and obtain \(\sum_{p_1q_0}\). Step 2: Multiply the base year prices of various commodities with base year weights and obtain \(\sum_{p_0q_0}\) Step 3: Divide \(\sum_{p_1q_0}\) by \(\sum_{p_0q_0}\) and multiply the quotient by 100. This gives us the price index. Laspeyres Index attempts to answer the question "What is the change in the aggregate value of the base period list of goods when valued at given period prices?"

If p1 = Price in the current year, q1 = quantity in the current year, po = price in the base year, q0 = quantity in the base year, the formula of Laspeyres Price index is given as:1. \(\frac{∑_{p_1q_0}}{∑_{p_0q_0}}\)2. \(\frac{∑_{p_0q_1}}{∑_{p_1q_0}}\)3. \(\frac{∑_{p_0q_0}}{∑_{p_1q_1}}\)4. \(\frac{∑_{p_1q_0}}{∑_{p_0q_1}}\)

Answer» Correct Answer - Option 1 : \(\frac{∑_{p_1q_0}}{∑_{p_0q_0}}\)

Laspeyres Method:

1. The Laspeyres Price Index is a weighted aggregate price index, where the weights are determined by quantities in the base period.

2. The formula for constructing the index is:

\(P_{01}=\frac{∑_{p_1q_0}}{∑_{p_0q_0}}\times100\)

Steps for calculating Laspeyres Price Index:

Step 1: Multiply the current year prices of various commodities with base year weights and obtain \(\sum_{p_1q_0}\).

Step 2: Multiply the base year prices of various commodities with base year weights and obtain \(\sum_{p_0q_0}\)

Step 3: Divide \(\sum_{p_1q_0}\) by \(\sum_{p_0q_0}\) and multiply the quotient by 100. This gives us the price index.

Laspeyres Index attempts to answer the question "What is the change in the aggregate value of the base period list of goods when valued at given period prices?"

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