The Table Below Shows the Price of a Commodity for Each

question 33

Essay

The table below shows the price of a commodity for each of ten consecutive years. $\begin{array}{l}\begin{array} { l l l l l l l l l l l } \hline \text { Year } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \\\hline\text { Price } & \$ 1.19 & \$ 1.22 & \$ 1.23 & \$ 1.45 & \$ 1.39 & \$ 1.42 & \$ 1.47 & \$ 1.55 & \$ 1.62 & \$ 1.65 \\\hline\end{array}\end{array}$

a. Using Year 1 as the base period, calculate the simple index for the price of the commodity for each year.
b. Plot the simple indexes for years 1-10.
c. Use the simple index to interpret the trend in the price of the commodity.

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Definitions:

Net Cost

The actual cost of a product or service after all discounts, rebates, or allowances have been applied.

Breakeven

A situation where the sum of all costs equals the sum of all revenues, with no profit or loss occurring.

Mark-up

The amount added to the cost price of goods to cover overhead and profit, often expressed as a percentage of the cost.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding cost of goods sold.