If the price of a product increases by 25%, by what percent should the consumption be reduced to keep the expenditure same?
Show answer & explanation
Correct answer: D
Explanation
Given:
Increase in price = 25%
According to the formula:
Percentage decrease in consumption = (Percentage increase in price / (100 + Percentage increase in price)) × 100
Percentage decrease in consumption = (25 / (100 + 25)) × 100 = 20%