A television manufacturing company has decided to increase the sale to beat the economic slowdown. It decides to reduce the price of television sets by 25% as a result of which the sales increased by 20%. What is the effect on the total revenue of the company?
Answers
Answer:
loss of 10 %
Step-by-step explanation:
rate *sale=revenue
100*100=10000
75*120=9000
now, (1000/10000)*100=10
Given,
Reduced the cost of Tv by 25%
The sales increased by 20%
To Find,
How does this affect the total revenue of the company?
Solution,
The company reduced the Tv price by 25%.
And the sales increased by 20%.
Let's take,
initially the cost of a Tv = 500rs.
The number of sales = 500.
Then the total revenue = 500 * 500
250000rs.
The company reduced the cost by 25%
Then the price for a Tv =
(500*25)100=125
500-125 =375rs.
The total number of sales increase by 20%
(500*20)/100 = 100
500+100 = 600.
Total revenue after decreasing the Tv cost =
375 * 600 =225000rs.
The difference in revenue = 250000 - 225000
25000rs.
The company's total revenue was reduced.
To find its percentage
(difference in revenue / initial revenue) *100
(25000 / 250000) *100 =10%
Hence, by decreasing the TV cost company's total revenue reduced by 10%.