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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 the expenditure on the commodity ?
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- 4% increase
- 4% decrease
- 8% decrease
- 8% increase
Correct Option: B
Let the CP of each article
= ₹100 and consumption
= 100 units
Initial expenditure
= ₹(100 × 100) = ₹10000
New price of article = ₹80
Consumption = 120 units
Expenditure = ₹(120 × 80) = ₹9600
Decrease = ₹(10000 – 9600) = ₹400
∴ Percentage decrease
| = | = 4% = 4% decreases | 10000 |
Aliter : Using Rule 3,
Required percentage decrease
| = | % = 4% decreases | 100 |
