Alarge manufacturer purchases an identical component from three independent suppliers thatdiffer in unit price and quantity supplied. The relevant data for 2007 and 2009 are given here.Unit Price ($)Supplier Quantity (2007) 2007 2009A 150 5.45 6.00B 200 5.60 5.95C 120 5.50 6.20a. Compute the price relatives for each of the component suppliers separately. Comparethe price increases by the suppliers over the two-year period.b. Compute an unweighted aggregate price index for the component part in 2009.c. Compute a 2009 weighted aggregate price index for the component part. What is theinterpretation of this index for the manufacturing firm?
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