Question

The price of sugar rises from Rs 40 per kg to Rs 50 per kg. If the expenditure cannot increase, the percentage of reduction in consumption is
1. 10%
2. 20%
3. 30%
4. 40%

Answer 1

Correct Answer - Option 2 : 20%

Given:

The price of sugar rises from Rs 40 per kg to Rs 50 per kg.

Formula used:

Percent reduction = {(Initial Value - Final Value)/Initial Value} × 100

Price x Consumption = Expenditure

Calculation:

Let the total expenditure be Rs 200.

then, initially at the rate of Rs 40/kg, the consumption was (200/40) = 5kg

After an increase in price at the rate of Rs 50/kg, the consumption was (200/50) = 4kg

Percent reduction in consumption = {(5 - 4)/5} × 100 = 20%

∴ The percent reduction in consumption is 20%.