SSC GD 2024 PYQ — Question 53

The correct answer is option 2 i.e. 2.89% decrease.

( t ) be the original tax rate.

( q ) be the original quantity of the article consumed.

 Revenue = ( R )

⇒  R = t × q

The tax is decreased by 17%,

⇒ New tax rate = (1 - 0.17) × t = 0.83t

 The consumption increases by 17%, 

⇒ New quantity = (1 + 0.17) × q = 1.17q

⇒ New revenue = (0.83t) × (1.17q) = 0.9701tq

The initial revenue is (t × q ), and the new revenue is ( 0.9701tq ). Percentage change in revenue = (New revenue - Initial revenue) / Initial revenue × 100

Percentage change in revenue = $\frac{0.9701tq - tq}{tq} \times 100$

Percentage change in revenue = $\frac{-0.0299tq}{tq} \times 100 = -2.89\%$

The percentage change in revenue is a decrease of 2.89%.