On increasing the price of tickets for a show by 20 % the audience decreases by 30%. What is the effect on revenue?
Answer & explanation
Correct answer: option 3
Assume:
- Original ticket price = ₹100
- Original audience = 100 people
So, original revenue:
$100 \times 100 = \text{₹10,000}$
After the changes:
- New ticket price = $100 + 20\% = \text{₹120}$
- New audience = $100 - 30\% = 70$
New revenue:
$120 \times 70 = \text{₹8,400}$
Percentage change in revenue:
$\frac{10000 - 8400}{10000} \times 100 = 16\%$
Since the revenue has decreased,
Correct Answer: 16% decrease