Price Index Formula

The normalized average of the price relatives for any class of goods and services in a specific area or region during a particular time interval is called as the price index. Given below is the Price index formula for calculating the price index on your own. As per the formula, the dividing the summation of products of current year price of goods and goods quantity with the summation of products base year price of goods and goods quantity gives you the price index.


Price Index = ∑p1q0 / ∑p0q0


p0 = Base Year Price of Goods
p1 = Current Year Price of Goods
q0 = Goods Quantity

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The above Price index formula in this page will be a very useful one for the personnel who administers the food cost and supply in the food industry.

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