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%.**