How do you calculate percentage change?
This is an economics question. PLEASE help me out if you can!!! (I'll be sure to choose a Best Answer)
2009 Prices: $2, $4, $1
2010 Prices: $2, $6, $2
Quantity: 100, 100, 200 (both years)
Question: What is the percentage change in the price of each of the 3 goods?
And: Using a method similar to the consumer price index, compute the percentage change in the overall price level.
Comments
Price Change
Goods 1 Goods 2 Goods 3
0% 50% 100%
CPI Using Laspeyres index
Goods 1 Goods 2 Goods 3
Prices 2009 2 4 1
Prices 2010 2 6 2
Quantity 2009/10 100 100 200
CPI - using Laspeyrs Formula 0% 67% 50%
Average CPI 39%
Cheers
Calculate Price Level
The $2 product is 0% increase
The $4 product is 50% increase
The $1 product is 100$ increase
An index might be:
.25 x 0% = 0%
.25 x 50% = 12.5%
.50 x 100% = 50%
Ave price increase = 62.5%