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.Solution
ATQ,
Let the original quantity bought be ‘x’ units and the price be Rs. ‘y’ per unit.
Initial expenditure = Rs. xy
New price = Rs. 1.25y
Reduced consumption = 0.80x
New expenditure = 1.25y × 0.80x = Rs. 1.00xy
Hence, the expenditure remains unchanged.
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