Question

When the price of a gas cylinder is increased by 20%, by what percent should a householder reduce his consumption such that there is no increase in his expenditure?

(1) \(8 \frac{2}{3}\%\)

(2) \(10 \frac{2}{3} \%\)

(3) \(12 \frac{2}{3} \%\)

(4) \(16 \frac{2}{3}\%\)

Answer 1

Correct option is:  (4) \(16 \frac{2}{3}\%\)

Let the original price be 100 units.

After a 20% increase, the new price is 120 units.

To keep expenditure constant, reduce consumption proportionally

The reduction percentage \(= \frac{20}{120} \times 100\%\)

\(= \frac{100}{6}\%\) 

 \(= 16 \frac{2}{3}\%\)