Question 36

The price of onions has been increased by 50%. In orderto keep the expenditure on onions the same the percentage of reduction in consumption has to be

Solution

$$ price \times consumption = expenditure $$.........(1)

assume initial price of onions be 100

           initial consumption = 100

expenditure = $$ 100 \times 100 = 10000 $$

price of onions has been increased by 50% = 150

assume consumption as x

expenditure remain constant as 10000

now substituting in (1)

$$ 100 \times 100 = 10000 $$

$$ 150 \times x = 10000 $$

$$ x =\frac{10000}{150} = \frac{200}{3} $$

new consumption = $$ \frac{200}{3} $$

percentage of reduction in consumption = $$ \frac{ 100 - \frac{200}{3}}{100} \times 100 = 33 \frac{1}{3} $$%


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