Question

an increase in in price of sugar by 20% a family reduced its consumption by 20% then the expenditure of the family of sugar decreased by what percent​

Answer 1

expenditure = price × consumption

e = pc

e' = p(1+20%)× c(1-20%)

=p(1+.2)×c(1-.2)

= 0.96pc

=(1-0.04)e

=(1-4%)e

new expenditure decreased by 4%