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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

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    Hence, the expenditure increases by 12%.

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