Question

If the price of a grocery item consumed by a family increases by 25%, then by what percentage should its consumption reduce, so as to keep the expenditure on this item unchanged?
1. 20%
2. 25%
3. 67%
4. 50%

Answer 1

Correct Answer - Option 1 : 20%

Calculation:

Let the original price of grocery be Rs. 100

Then,

Increased price = Rs. 25

Reduction in consumption = [(25/125) × 100]%

⇒ 20%

∴ The family will have to reduce the consumption of grocery by 20%