Question

The consumption of a household increases by 25%.By how much percent average price of the goods should be reduced so that expenditure does not change

Answer 1

Answer:

Step-by-step explanation:

25% of 100 = 100*25/100 = 25

Increased % of household= 100+25=125

125= 100

1= 100/125

100= 100/125*100(20*4) =80%

Goods should be increased by 100-80 =20%

Answer 2

Answer: Consumption expenditure reduced by 20%.

Step-by-step explanation:

Since we have given that

The consumption of a household increases by 25%

We need to find the % average price of the goods should be reduced so that expenditure does not change.

So, it becomes

(25/100+25)× 100

= (1÷5)×100

=20%

Hence, consumption expenditure reduced by 20%.