Question 7

On decreasing the price of a fan by 40%, its sales increases by 50%. What will be the percentage increase or decrease in its revenue?

Solution

Let 10 fans are sold for Rs. 10, i.e. price of 1 fan = Re 1

=> Revenue = $$10\times10=Rs.$$ $$100$$

Price is decreased by 40%, => New price = $$10-(\frac{40}{100}\times10)=Rs.$$ $$6$$

Similarly, new sales = $$10+(\frac{50}{100}\times10)=15$$

=> New revenue = $$6\times15=Rs.$$ $$90$$

$$\therefore$$ % decrease in revenue = $$\frac{(100-90)}{100}\times100=10\%$$

=> Ans - (C)

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