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      Question

      If the price of a commodity is increased by 25% and a

      person reduces his consumption by 20%, find the percentage change in his expenditure.
      A 8% increase Correct Answer Incorrect Answer
      B 12% decrease Correct Answer Incorrect Answer
      C 18% decrease Correct Answer Incorrect Answer
      D Remains unchanged Correct Answer Incorrect Answer

      Solution

      ATQ,

      Let the original quantity bought be тАШxтАЩ units and the price be Rs. тАШyтАЩ per unit.

      Initial expenditure = Rs. xy

      New price = Rs. 1.25y

      Reduced consumption = 0.80x

      New expenditure = 1.25y ├Ч 0.80x = Rs. 1.00xy

      Image

      Hence, the expenditure remains unchanged.

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