Question

if the price of machine is reduced by 20% and the number of machines sold is increased by 40%,what will be the effect on the revenue​

Answer 1

Method 1-

let price of each machine= 100

number of machine sold = 100

then revenue = 100×100= 10000

now, price reduced to 20% = 80

number of machine increased 40% = 140

now revenue = 140×80 = 11200

i.e revenue gets increased by 11200-10000= 1200

means (1200/10000)×100 = 12% increased revenue.

Method 2-

apply formula > x + y + (xy/100)

where x = 40%, y = - 20% ( reduction )

so, 40-20 - (40×20/100)

20-8 = 12% ( positive value means profit )

means 12% profit in revenue.