The price of a commodity increases by 28%. However, the expenditure on it increases by 12%. What is the percentage increase or decrease in its consumption?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 12.5% Decrease
Revised = Initial × (1 + increase% /100)
Let the previous price of the commodity is Rs. 100P per unit.
The revised price of the commodity will be (100P × 1.28) = Rs. 128P
But, the expenditure has become = (100P × 1.12) = Rs. 112P
Hence, at Rs. 112P, the amount of commodity can be acquired = (112/128) unit = 7/8 unit
So, the lesser quantity than earlier at Rs. 112P = (1 - 7/8) = 1/8
The percentage decrease in its consumption = 1/8 × 100% = 12.5%