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    Question

    The cost of an item rose by 20%. Because of this, the

    number of items sold dropped by 10%. What is the overall percentage change in total earnings?
    A 12% decrease Correct Answer Incorrect Answer
    B 8% increase Correct Answer Incorrect Answer
    C 5% increase Correct Answer Incorrect Answer
    D 9% decreased Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    ATQ,

    Let the initial cost per item be Rs. ‘10a’ And initial quantity sold be ‘10b’ So, original revenue = 10a × 10b = Rs. ‘100ab’ New price per item = 10a × 1.2 = Rs. ‘12a’ New quantity sold = 10b × 0.9 = Rs. ‘9b’ New revenue = 12a × 9b = Rs. ‘108ab’ Net change = {(108ab – 100ab)/100ab} × 100 = 8% increase

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