If the weights are taken as the arithmetic mean of base and current year quantities, then the weighted aggregative index is called marshal edgeworth index. Like Fisher’s index, Marshall edgeworth index also requires too much labor in selection of commodities. In some cases the usage of this index is not suitable, for example the comparison of the price level of a large country to a small country. Marshal edgeworth index can be calculated by using the formula given below.
Problem: With the help of following data, construct an index number using Marshal Edgeworth Formula.
Solution:
