JY CHEN - Ask Anything, Learn Everything. Logo

In Business / High School | 2025-07-08

7. The prices of a commodity in the year 1975 and 1980 were ₹25 and ₹30 respectively. Taking 1980 as the base year, the price relative is: (a) ₹85 (b) ₹90.91 (c) ₹98.25 (d) None of these.

Asked by ireneez2451

Answer (1)

To solve this problem, we need to find the price relative, using the year 1980 as the base year for the index calculation. A price relative is used to compare the price of a commodity at one point in time to another.
Here are the steps to calculate the price relative:

Identify the Prices :

Price in 1975 (P1) = ₹25
Price in 1980 (P0) = ₹30


Calculate the Price Relative : The formula to calculate the price relative is:
Price Relative = ( Price in 1980 Price in 1975 ​ ) × 100
Substituting the given values:
Price Relative = ( 30 25 ​ ) × 100
Price Relative = 0.8333 × 100
Price Relative = 83.33

Select the Correct Multiple Choice Answer : Based on the calculation, the price relative is 83.33, which is not listed as one of the specified multiple-choice options. Therefore, the correct choice is:
(d) None of these.


In conclusion, using 1980 as the base year, the price relative for the year 1975 is 83.33, indicating that in 1975, the price of the commodity was 83.33% of the price in 1980.

Answered by ElijahBenjaminCarter | 2025-07-21

Related Questions in Business

[Free] When the yield to maturity of a bond goes up, the price typically: A. is determined by market factors B. goes down C. does not change D. goes up

[Free] A type of life insurance policy that requires premiums only for a specified number of years or to a specific age is called a: A. term life policy B. limited pay policy C. key man insurance policy D. split dollar policy

[Free] Which of the following correctly explains how the concept of demand affects the change in use of credit? Select the two correct answers. A. High interest rates yield low demand for credit. B. Low interest rates yield high demand for credit. C. High interest rates yield high demand for credit. D. Low interest rates yield low demand for credit. E. Both low and high interest rates yield low demand for credit because consumers see it as an indicator that the market is not in equilibrium. Demand is highest when rates are neither too high nor too low.

[Free] A company is researching mining at four different land areas using different types of equipment. The table below shows the costs of land, equipment, mining, and reclamation for the four locations: | Locations | Cost of land | Cost of equipment | Cost of mining and reclamation | Time taken to mine the area | | --------- | ------------ | ----------------- | -------------------------------- | --------------------------- | | 1 | $100,000 | $10,000 | $5,000 per day | 30 days | | 2 | $35,000 | $6,000 | $4,500 per day | 45 days | | 3 | $30,000 | $7,500 | $3,500 per day | 120 days | | 4 | $40,500 | $8,000 | $7,000 per day | 65 days | Considering all costs, which location will cost the least for the company to mine? A. Location 1 B. Location 2 C. Location 3 D. Location 4

[Free] Internal-operational communications are messages that A. are circulated both inside and outside a business B. get an organization's work done C. are sent between competing organizations within the same industry D. employees send to discuss strictly personal matters