Question

A large manufacturer purchases an identical component from three independent suppliers that differ in unit price and quantity supplied. The relevant data for 2007 and 2009 are given here.
a. Compute the price relatives for each of the component suppliers separately. Compare the price increases by the suppliers over the two-year period.
b. Compute an unweighted aggregate price index for the component part in 2009.
c. Compute a 2009 weighted aggregate price index for the component part. What is the interpretation of this index for the manufacturing firm?


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  • CreatedSeptember 20, 2015
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