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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?
Answer & Solution
Correct Answer:
Option
B
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%
Thus, there is a decrements of 4%
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25. 24 different 1. 1÷25×100=4%
x
.
Now, the price decreases by
20
%
.
Current price
=
(
x
−
20
%
of
x
)
=
0.8
x
.
Due to decrement in price,
20
%
consumption has increased.
So, current expenditure on commodity
=
(
0.8
x
+
20
%
of
0.8
x
)
=
0.96
x
∴
Percentage change in expenditure on the commodity
=
0.96
x
−
x
x
×
100
=
−
4
%
Hence, there is
4
%
decrement in the expenditure on the commodity