If the price of a commodity is increased by 36%, by what percentage (rounded off to 1 decimal place) should its consumption be decreased so that the expenditure of the commodity stays the same?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 26.5%.
Let the initial price of the commodity = 100
Let the initial consumption = 100
Initial expenditure = 100 × 100 = 10000
New price = 136
Let the new consumption = x
So, 136x = 10,000
x = 10000/136 = 73.52... ≈ 73.5
Decrease in consumption = 100 - 73.5 = 26.5
Therefore, consumption should be decreased by 26.5% to keep the expenditure the same.