When the price of cloth was reduce by 25%, the quantity of cloth sold increased by 20%. What was the effect on gross receipt of the shop?

Let initial Volume sold = $$x$$ units

Original Selling Price = Rs. $$y$$

=> Total Revenue = Volume $$\times$$ Selling Price = $$xy$$

New Volume Sold = $$\frac{120}{100}\times x=1.2x$$ units

New Selling Price = $$\frac{75}{100}\times y=Rs.$$ $$0.75y$$

=> Total Revenue = $$1.20x \times 0.75y = 0.9xy$$

$$\therefore$$ % decrease in revenue = $$\frac{(xy-0.9xy)}{xy}\times100$$

= $$0.1\times100=10\%$$

=> Ans - (D)