The price of tea increased by 40% and then decreased by 20%.If a person now…
2023
The price of tea increased by 40% and then decreased by 20%.If a person now reduces his consumption of tea by 6¼%, then what is the percentage change in his expenditure?
- A.
Decrease, 5%
- B.
Increase, 15%
- C.
Increase, 5%
- D.
Decrease, 15%
Attempted by 141 students.
Show answer & explanation
Correct answer: C
Key idea: Expenditure = Price × Quantity
Price: Increase by 40% → factor 1.4. Then decrease by 20% → multiply by 0.8. Net price factor = 1.4 × 0.8 = 1.12 (12% increase).
Consumption: Reduced by 6.25% → quantity factor = 1 − 0.0625 = 0.9375.
Expenditure: multiply price factor and quantity factor: 1.12 × 0.9375 = 1.05 → 5% increase in expenditure.
Answer: Increase, 5%.