The cost of tomatoes per kg is increased by 300%. A housewife reduces her consumption of tomatoes by 70%. By what percentage does her expenditure on tomatoes increase or decrease?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Increases, 20%.
Let the initial price of tomatoes = ₹100/kg and the initial consumption = 1 kg
The total initial expenditure = ₹100 × 1 = ₹100
New price of tomatoes = ₹100 + 300% of ₹100 = ₹400
The housewife reduces her consumption by 70%.
New Consumption = 1(1 − 0.7) = 0.3 kg
The new expenditure = ₹400 × 0.3 = ₹120
The required percentage = [(120 - 100)/100] × 100 = (20/100) × 100 = 20%
Therefore, the housewife's expenditure on tomatoes increases by 20%.