If the price of a commodity is decreased by 20% and its consumption is increased by 10%, what will be the increase or decrease in the expenditure on the commodity?
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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.
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.
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