The price of a commodity increases by 28%. However, the expenditure on it increases by 12%. What is the percentage increase or decrease in its consumption?
Answer & explanation
Correct answer: option 2
28% = \(\frac{7}{25}\) & 12% = \(\frac{3}{25}\)
Ratio of , Initial : New
Price 25 : 32
Consumption a : b
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Expenditure 25 : 28
{ Expenditure = Price × Consumption }
\(\frac{25 × a }{32 × b}\) = \(\frac{25}{28}\)
\(\frac{a}{b}\) = \(\frac{8}{7}\)
Percentage decrease in consumption = \(\frac{8-7}{8}\) × 100
= \(\frac{1}{8}\) × 100
= 12.5%
Ans = Decrease in 12.5%