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The price of Maruti car rises by 30 percent while the sales of the car come down by 20%. What is the percentage change in the total revenue?
Answer & Solution
Correct Answer:
Option
C
Let initial price of Maruti Car be Rs. 100
As price increases 30%, price of car will become, (100 + 30% of 100) = Rs. 130
Due to increase in price, sales is down by 20%. It means, it is going make 20% less revenue as expected after increment of price
So, New revenue = (130 - 20% of 130) = Rs. 104
The initial revenue was Rs. 100 which becomes Rs. 104 at the end. It means there is 4% increment in the total revenue
Mind Calculation Method:
100 == 30%↑(price effect) ==> 130 == 20%↓(sales effects) ==> 104
Hence, 4% rises
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Login30-20-6
4% increase