Examveda
Examveda

If the price of a commodity is decreased by 20% and its consumption is increased by 20%, what will be the increase or decrease in expenditure on the commodity?

A. 4% increase

B. 4% decrease

C. 8% increase

D. 8% decrease

Answer: Option B

Solution(By Examveda Team)

Let the initial expenditure on the commodity be Rs. 100.
Now, the price decreases by 20%,
Current Price = (100 - 20% of 100) = Rs. 80.
Same time due to decrements in price 20% consumption has been increased. So,
Current expenses on commodity = (80 + 20% of 80)= Rs. 96.
Here, the initial expenditure was Rs. 100 which became 96 at the end, it means there is 4% decrements in the expenditure of the commodity.

Mind Calculation Method:
100 === 20%↓(Decrements in Price) ===> 80 === 20%↑(Increment in Consumption) ===> 96.
Thus, there is a decrements of 4%

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Comments ( 2 )

  1. SUPRATIK BHATTACHARYA
    SUPRATIK BHATTACHARYA :
    5 months ago

    the formula is ((X/10))^2%

  2. Saurav Sarkar
    Saurav Sarkar :
    4 years ago

    20-20-((20*20)/100) = -4 ie; 4% decrease

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