Which formula defines Laspeyres' price index?
Correct answer: B. Σp1q0 ÷ Σp0q0 × 100
- A. Σp1q1 ÷ Σp0q0 × 100
- B. Σp1q0 ÷ Σp0q0 × 100
- C. Σp1q1 ÷ Σp1q0 × 100
- D. Σp0q1 ÷ Σp0q0 × 100
Explanation
Laspeyres' price index compares current prices with base-period quantities held constant. The base quantities, q0, are used in both the numerator and denominator.
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