The shopkeeper increased the price of a product by 25% so that customer finds difficult to purchase the required amount. But Somehow the customer managed to purchase only 70% of the required amount. What is the net difference in the expenditure on that product ?

Answer: Option C

Let initially the quantity and rate be 100 each
Quantity × rate = Expenditure
100 × 100 = 10000
Now, Increase in price is 25% and new quantity is 70% of original
Quantity × rate = Expenditure
70 × 125 = 8750
Decreased expenditure,
= 10000 - 8750 = 1250
% decrease $$=\frac{1250\times 100}{10000}=12.5\%$$