A bakery comes into new management who decides to cut the price of a loaf of bread in the hopes of increasing revenues by 50%. Under old management 500 loafs of bread were sold each day at £1.80 per loaf.
If the new management can increase sales by 3/4, by what percentage must the price fall?
Answers
Given : A bakery comes into new management who decides to cut the price of a loaf of bread in the hopes of increasing revenues by 50%. Under old management 500 loafs of bread were sold each day at £1.80 per loaf. the new management can increase sales by 3/4,
To Find : by what percentage must the price fall
Solution:
Under old management 500 loafs of bread were sold each day at £1.80 per loaf.
Revenue = 500 * 1.80 = 900£
hopes of increasing revenues by 50%.
=> New revenue = 900 + (50/100)900
= 900 + 450
= 1350 £
new management can increase sales by 3/4,
New Sale = 500 + 500(3/4)
= 500 + 375
= 875
New price = 1350/875 = 54/35 £
Earlier price = 1.8
Decrease = 1.8 - 54/35 = 9/35 £
% Decrease = 100* (9/35)/1.8
= 100/7
= 14.286 %
By 14.286 % price should fall
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