If the price of a commodity rises from Rs. 80 to Rs. 100, its price relative is:
Correct answer: D. 125
- A. 80
- B. 100
- C. 120
- D. 125
Explanation
The price relative is current price divided by base price, multiplied by 100. Thus, 100 ÷ 80 × 100 equals 125, showing a 25 percent increase.
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About Index Numbers
Index numbers measure relative changes in prices, quantities or values over time using a base period. Work includes simple and weighted price indices, aggregate methods, consumer price calculations, percentage change and purchasing power, with attention to choosing a base year and interpreting an index rather than treating it as an absolute amount.
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