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ATQ,
Let the original amount of the product bought by the person be ‘x’ units and the price of that product be Rs. ‘y’ per unit.
Initial expenditure = Rs. xy
New increased price = Rs. 1.20y
New decreased consumption = 0.90x
New expenditure = 1.20y × 0.90x = Rs. 1.08xy
Hence, the expenditure increases by 8%.
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