When the price of a commodity increased by 23%, a family reduced its consumption in such a way that the expenditure on it was only 5% more. By what percentage has the family reduced the consumption of the commodity (correct to one decimal place)?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 14.6%.
Let, initial price = 100; Initial expenditure = 100
So, increased price = 123; Increased expenditure = 105
Reduced percentage of consumption = [(123 - 105)/123] × 100
= (18/123) × 100
= 14.6% (approx)