Question

If the price of a commodity is decreased by 20% and its consumption is increased by 20%, what will be the increase or decrease in expenditure on the commodity?
A.4% increase
B.4% decrease
C.8% increase
D.8% decrease

Answer 1

the answer is decrease by 4%

Answer 2

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Let the initial expenditure on the commodity be Rs. 100.

Now, the price decreases by 20%,

Current Price = (100 - 20% of 100) = Rs. 80.

Same time due to decrement in price 20% consumption has been increased. So,

Current expenses on commodity = (80 + 20% of 80)= Rs. 96.

Here, the initial expenditure was Rs. 100 which became 96 at the end, it means there is 4% decrement in the expenditure of the commodity.

Mind Calculation Method:

100===20%↓(Decrement in Price)===>80===20%↑(Increment in Consumption)===>96.

Thus, there is a decrement of 4%.