Question

the tax on a commodity is diminished by 20% and it's consumption increase by 15% find the effects on revenue

Answer 1

t looks like question assumes 
revenue = consumption × tax amount per commodity

Let consumption = 100, tax amount per commodity = 100 
Revenue = 100 × 100 = 10000

new consumption = 100(100+15)100=115100(100+15)100=115
New tax amount per commodity = 100(100−20)100=80100(100−20)100=80
New revenue = 115 × 80 = 9200

Decrease in revenue = 10000 - 9200= 800
Percentage decrease in revenue = 800×10010000=8%

Answer 2

Answer:he revenue is decreased by 8%.

Step-by-step explanation:

Let originally revenue obtained by Rs. x.

New revenue = (Consumption * Tax)

= (115% of 80% of Rs. x) = Rs(115/100*80/100*x)=Rs.92x/100

= 92% of the original.

Hence, the revenue is decreased by 8%.