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  1. The tax on an article decreases by 10% and its consumption increases by 10%. Find the effect per cent on its revenue.
    1. 1% increase
    2. 2% decrease
    3. 1% decrease
    4. 2% increase
Correct Option: C

Let the original consumption be 1 unit & tax on it be ₹100.
So, revenue = ₹(100 × 1) = ₹100.
New consumption

=
110
× 1=
11
units.
10010

Now, tax on 1 unit = ₹90
Tax on
11
units
10

= 90 ×
11
= ₹ 99.
10

∴ Decrease in revenue = 1 %



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