5.1998 Price Quantity
cauliflower $200 100
broccoli $ 75 50
carrots $ 50 500
Total $325
Weight of each good
weight for cauliflower 200/325= 0.61532
weight for broccoli 75/325= 0.2307692
weight for carrots 50/325=0.1538461
Prices in the base year
cauliflower 200/100=$2
broccoli 75/50=$1.5
carrots 50/500=$0.1
1999 Price Quantity
cauliflower $225 75
broccoli $120 80
carrots $100 500
Total $445
Weight of each good
weight for cauliflower 225/445=0.5056179
weight for broccoli 120/445=0.2696629
weight for carrots 100/445=0.2247191
Prices in the base year
Cauliflower 225/75=$3
broccoli 120/80=$1.5
carrots 100/500=$0.2
Percentage change in price
Cauliflower $2 to $3 50% increase
Broccoli $1.5 to $1.5 0% change
Carrots $0.1 to $0.2 0.5% increase
ARE THESE PERCENTAGE CHANGE IN PRICE CORRECT???
They look good to me except for the last one...is it 0.1 to 0.2 equal to 0.5% increase or 100% increase...hmmm
In order to calculate the percentage change in price correctly, you need to use the following formula:
Percentage change in price = [(New price - Old price) / Old price] x 100
Let's apply this formula to the carrots' price.
Old price of carrots = $0.1
New price of carrots = $0.2
Percentage change in price of carrots = [(0.2 - 0.1) / 0.1] x 100 = (0.1 / 0.1) x 100 = 1 x 100 = 100%
Therefore, the correct percentage change in price for carrots is 100% increase, not 0.5% increase.