Question
If the price of a commodity increases by 15%, by what
percentage should its consumption be reduced so that the total expenditure remains unchanged?Solution
Let the original price be 100 and consumption be 100 units. New price = 115. Let new consumption be x units. To keep expenditure the same: 115 × x = 100 × 100. x = 86.96 units. Reduction in consumption = (100 - 86.96)/100 × 100 ≈ 13.04%. = 13.04%
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