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      Question

      The price of a certain item rises by 40%, while the

      consumption is decreased by 20%. Calculate the percentage increase or decrease in the expenditure.
      A 28% increase Correct Answer Incorrect Answer
      B 12% increase Correct Answer Incorrect Answer
      C 18% decrease Correct Answer Incorrect Answer
      D Remains unchanged Correct Answer Incorrect Answer

      Solution

      Let the original quantity be ‘x’ units and the price per unit be Rs. ‘y’.Initial expenditure = Rs. xy

      New price = Rs. 1.40y

      Decreased consumption = 0.80x

      New expenditure = 1.40y × 0.80x = Rs. 1.12xy

      Image

      Hence, the expenditure increases by 12%.

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