Many factors influence the retail price of gasoline. The following table shows t

Question

Many factors influence the retail price of gasoline. The following table shows the average retail price for a gallon of regular grade gasoline for each year from 2011 through 2014 (U.S. Energy Information Administration website, April 2015).

Round your answers to one decimal place.

a. Use 2011 as the base year and develop a price index for the retail price of a gallon of regular grade gasoline over this four-year period.

b. Use 2012 as the base year and develop a price index for the retail price of a gallon of regular grade gasoline over this four-year period.

Year Average Price ($) 2011 3.521 2012 3.618 2013 3.505 2014 3.358

Explanation / Answer

a) considering 2011 year as base ; price index of year XXXX =(price in Yr XXXX/price in year 2011)*100

therefore price index:

b) similarly as above :

please revert for any clarification required

Year Average Price 2011 100.0 2012 102.8 2013 99.5 2014 95.4

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