Due to an increase of 20 percent in the price of rice, the consumer decreases his consumption by 5 percent. What is the percentage change in total expenditure?
Answer & explanation
Correct answer: option 4
20% = \(\frac{1}{5}\)
5% = \(\frac{1}{20}\)
ATQ ,
Price 5 : 6
Consumption 20 : 19
Expenditure a : b
{ Price × Consumption = Expenditure }
Now ,
\(\frac{5×20 }{6 × 19}\) = \(\frac{a}{b}\)
\(\frac{a}{b}\) = \(\frac{100}{114}\)
Expenditure increases by = 114 - 100 = 14
Decreased percentage = \(\frac{14}{100}\) × 100 = 14%