From the following data of wholesale prices of a certain ommodity, construct (i) Fixed Base Index (1979 = 100) and (ii) Chain index numbers.

Question: From the following data of wholesale prices of a certain ommodity, construct (i) Fixed Base Index (1979 = 100) and (ii) Chain index numbers.

Year: 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988
Price: 75 50 65 60 72 70 69 75 84 80

Solution:

Using the formulae

chain indices homework

It may be noted that the chain indices are the same as the fixed base indx numbers