Q10
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
AnswerC.
8% increase
D.
8% decrease
Answer: Option B
Solution
Answer: Option B
Solution:
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%