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Q: If the price of a commodity is decreased by 20% and its consumption is increased by 10%, what will be the increase or decrease in the expenditure on the commodity?

  • 1
    increase 12%
  • 2
    decrease 12%
  • 3
    increase 16%
  • 4
    decrease 16%
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Answer : 2. "decrease 12%"
Explanation :

Answer: B) decrease 12% Explanation: Given the price of a commodity is decreased by  p = 20% And its consumption is increased by q = 10% Now, required increase or decrease in the expenditure on the commodity can be  p + q + pq/100 = -20 + 10 - 200/100 = -10 - 2 = -12%.   Hence, decrease in the expenditure = 12%

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