Question

In 1976 the average price of a commodity was 20% more than that in 1975 but 20% less than that in 1974 and more over it was 50% more than that in 1977. The price relatives using 1975 as base year (1975 price relative = 100) then the reduce date is:(a) 8,.75(b) 150,80(c) 75,125(d) None of these.​plz guy's give me answer with solution..

Answer 1

Answer:

We are given that the price relative of commodity for the base year 1975 as 100.  

Now, let's calculate the price of the commodity in each year:

Step 1:

The average price of the commodity in 1976 = 20% more than that in 1975

i.e., Price of commodity in 1976 = 100 + (20/100)*100 = 120

Step 2:

The average price of the commodity in 1976 = 20% less than that in 1974

i.e., Price of commodity in 1976 = price of commodity in 1974 * [1 – 20/100]

⇒ 120 / [1 – 0.2] =  price of commodity in 1974 ….. [from step 1]

⇒ Price of commodity in 1974 = 120/0.8 = 150

Step 3:

The average price of the commodity in 1976 = 50%  more than that in 1977

i.e., Price of commodity in 1976 = price of commodity in 1977 * [1 + 50/100]

⇒ 120 / [1 + 0.5] =  price of commodity in 1977 …. [from step 1]

⇒ Price of commodity in 1977 = 120/1.5 = 80

From calculations all the cases 1, 2 & 3, of the prices of the commodity in each year, we can clearly see that our final answer is option (b) 150, 80.