Question 140

Price of a commodity has increased by 60%. By what per cent must a consumer reduce the consumption of the commodity so as not to increase the expenditure ?

Solution

in such questions a consumer should reduce his consumption to $$\frac{100}{100 +- R}$$ x 100

as price are increased by 60%

new consumption should be = $$\frac{100}{100 + 60}$$ x 100 (used + sign as the percentage has been increased) = 62.5%

hence decrease in consumption = 100 - 62.5 = 37.5%

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