Laspeyres price index is 115 and Paasche price index is 110. The Bowley index (arithmetic mean of L and P) is approximately: MCQ with Answer and Explanation

Laspeyres price index is 115 and Paasche price index is 110. The Bowley index (arithmetic mean of L and P) is approximately:
A. 113.5
B. 110.0
C. 112.5
D. 112.0
Answer: Option C
Solution (By JKExamLibrary)
Bowley index = (L+P)/2 = (115+110)/2 = 112.5. (Note: some books call Marshall-Edgeworth-Bowley index, but this is simple arithmetic average).

This question belongs to: Accountancy and Statistics Statistics

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