When the price of a watch was reduced by 20%, the number of watches sold is increased by 40%. What was the effect on the sales in percentage?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 12% increase
Formula used:
Effective percentage change = x + y + (xy/100) ---- (1)
Calculations:
Using equation (1), we get
Effective change = - x + y - (xy/100)
⇒ -20 + 40 - 800/100 = 12
Thus, there is an icrease of 12%.