If the price of potatoes increases by 10 percent, then by how much percent does a user have to cut down on his consumption of potatoes so that the expenditure on potatoes remains unchanged?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is Option 4 i.e. 9.1 percent.
Let the price of potatoes be 100 units
Given that
If the price of potatoes increases by 10 percent,
Then the increased price of potatoes is 110 units
The expenditure is unchanged
As we know,
Expenditure = Price × Consumption
The price is inversely proportional to consumption
A user has to cut down on his consumption percentage = (10/110) × 100
= 100/11 = 9.09 = 9.1%