When the price of a cycle is decreased by 20%,then the selling is increased by 20%. What is the impacton the receipt of the revenue?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 4% loss
Let CP of a cycle be 100Rs and person sells 100 units of cycles
then, revenue collected by person = 100 × 100 = 10000 Rs
When the price of a cycle is decreased by 20%,and the selling is increased by 20% then
New CP = 100 - 20% of 100 = 80 Rs
New selling = 100 + 20% of 100 = 120 units
New revenue = 80 × 120 = 9600
= (10000 - 9600) × 100/10000
400 × 100/10000 = 4% loss