Question

If the price of raisin falls down by 50%, by how much percent must a house holder increase its consumption, so as not to decrease his expenditure on this item?
1. 50%
2. 100%
3. 200%
4. 75%

Answer 1

Correct Answer - Option 2 : 100%

Given:

Rate, R = 50%

Concept used:

If the price of commodity decreases by R%, then the increase in consumption, so as not to decrease the expenditure is [{R/(100 - R)} × 100]%

Calculation:

As we know that,

Increase in consumption = [{R/(100 - R)} × 100]%

⇒ [{50/(100 - 50)} × 100]%

⇒ [(50/50) × 100]%

⇒ 100%

∴ The percentage increase in consumption is 100%.

If the price of commodity increases by R%, then the reduction in consumption, so as not to increase the expenditure is [{R/(100 + R)} × 100]%