If the price of sugar increases by 25 percent, determine the percentage by which its consumption should be reduced so as not to increase the expenditure on it.
A25%
B30%
C20% ✓ Correct
D35%
Correct answer: (C) 20%
Explanation
Consumption must fall by 20%.
New price factor = 1.25.
To keep expenditure same, consumption factor = 1/1.25.
= 0.80, a fall of 0.20.
Reduction = 20%.
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