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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 ‘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

    Image

    Hence, the expenditure remains unchanged.

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