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Water tax is increased by 20% but its consumption is decreased by 20%. Then the increase or decrease in the expenditure of the money is ?
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- No change
- 5% decrease
- 4% increased
- 4% decreased
Correct Option: D
Let tax = Rs. 100 and Consumption = 100 units
Original expenditure = Rs. (100 x 100) = 10000
New expenditure = Rs. (120 x 80) = Rs. 9600
∴ Decreased in expenditure = (400 x 100)/1000 % = 4%
