The price (per litre) of petrol increases by 40%. By what percent should its consumption be reduced such that the expenditure on it increases by 12% only?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 20%.
Let initial price = 100, initial consumption = 100 units
Initial expenditure = 100 × 100 = 10000
New price = 140
Let new consumption = C
New expenditure = 140 × C
140C = 10000 × 1.12 = 11200
C = 11200 / 140 = 80
Consumption reduced from 100 to 80
Reduction percent = (100 − 80)/100 × 100 = 20%