TABLE 16-15
Given Below Are the Prices of a Basket

question 111

Short Answer

TABLE 16-15
Given below are the prices of a basket of four food items from 1996 to 2000.
$$\begin{array} { l c c c c } \hline \text { Year } & \begin{array} { c } \text { Wheat } \\( \$ / \text { Bushel } )\end{array} & \begin{array} { c } \text { Corn } \\( \$ / \text { Bushel } )\end{array} & \begin{array} { c } \text { Soybeans } \\( \$ / \text { Bushel } )\end{array} & \begin{array} { c } \text { Milk } \\( \$ / \text { hundredweight) }\end{array} \\\hline 1996 & 4.25 & 3.71 & 7.41 & 15.03 \\1997 & 3.43 & 27 & 7.55 & 13.63 \\1998 & 2.63 & 23 & 6.05 & 15.18 \\1999 & 2.11 & 1.97 & 4.68 & 14.72 \\2000 & 2.16 & 1.9 & 4.81 & 12.32\end{array}$$
-Referring to Table 16-15, what is the Laspeyres price index for the basket of four food items in 2000 that consisted of 50 bushels of wheat, 30 bushels of corn, 40 bushels of soybeans and 80 hundredweight of milk in 1996 using 1996 as the base year?

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Definitions:

Demand-oriented

A pricing strategy where the price is set based on consumer demand, often adjusting prices in response to market conditions.

Target Pricing

A pricing strategy in which the selling price of a product is determined based on the desired profit margin and market conditions.

Ultimate Consumers

The end users who purchase products or services for personal use and not for manufacturing or resale purposes.

Odd-even Pricing

A pricing strategy that involves setting prices just below a round number, e.g., $99.99 instead of $100, to make a product seem less expensive.