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A shopkeeper reduces the price of a pen by 25% as a result of which the sales quantity increased by 20%. If the revenue made by the shopkeeper decreases by x%, then x is
Correct Answer: 10
Let the cost price of a pen be Rs . 100, and assume the initial sales were of 10 pens.
Now, the revenue generated by the shopkeeper initially = 100*10 = Rs. 1000
Now, the shopkeeper reduces the price of the pen by 25%
Therefore, the new price of the pen = Rs. 75
Also, the sale quantity increased by 20%
So, the new sale quantity = 10*1.2 = 12
Therefore, the new revenue generated by the shopkeeper = 75*12 = Rs. 900
The new revenue is Rs.100 less than the previous revenue.
Therefore, % decrease in revemue = (100/1000)*100 = 10%
Thus, the value of x = 10%
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