When the price of an article was reduced by 25%, its sale was increased by 75%. Calculate the net effect on revenue.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 31.25% increase
Price of article reduction = 25%
Sale of article increment = 75%
Net effect on revenue = Increment in sale - Reduction percentage in Price - ((Increment in sale × Reduction Percentage in price)/100)
Net effect on revenue = 75 - 25 - (75 × 25)/100 % = 50 - 75/4 % = 50 - 18.75 = 31.25%
As the net effect result is a positive sign, then there is an increase