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CPI (Consumer Price Index ) – for Medical Supply X The price of Medical supply X...

CPI (Consumer Price Index ) – for Medical Supply X

The price of Medical supply X in year 2019 is $65, in Year 1982-184 is $25. The CPI in 2012 is 240.

a. What is the CPI of Medical X in year 2019?

b. What is the price of Medical supply X in year 2010 when CPI equals to 220?

c. What is the inflation level from year 2012 to 2019 for this Medical supply X?

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Answer #1

Soln. Consider the year 1982-1984 as base year

Therefore, CPI in 2019 = [Price of medical supply in 2019/Price of medical supply in base year]*100

= [65/25]*100

CPI in 2019 = 260

(a) Therefore, CPI of medical supply X in 2019 = 260

(b) Let the price of medical supply X in year 2010 be P

Therefore, CPI in 2010 = [Price of medical supply in 2010/Price of medical supply in base year]*100

=> 220 = [P/25]*100

=> P = 55

Therefore, Price of medical supply in 2010 is $55

(c) Change of CPI from 2010 to 2019 = 260 - 220 = 40

Percentage change = [40/220]*100 = 18.2%

Therefore, inflation level is 18.2%

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