The price of an item was increased by 10%. This reduced the monthly total sales by 20%. The overall effect on the value of monthly sales is a
Let us assume the price of the article to be Rs. 100. Let the number of articles sold be 100.
Total sales = 100*100 = 10,000
Now, the price increases by 10% => New cost = Rs. 110
Sales decrease by 20% => New sales = 80 units.
Now, new sales value = 80*110 = Rs. 8800
%age change =(10000 - 8800) / 10000 = 1200/10000 = 12% decrease.
Option D is the right answer.
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