Question

If the price of the sugar is raised by 25%, find by how much percent a homemaker should reduce the consumption of sugar so as not to increase his/her expenditure?

• A. 10%
• B. 12%
• C. 20%
• D. 15%

Hint:

If price increases by 1/4 (25%), consumption must decrease by 1/5 (20%).

Answer 1

The Correct Option is C

Step 1: Concept
Expenditure = Price $\times$ Consumption. If Expenditure is constant, Price and Consumption are inversely proportional.

Step 2: Meaning
Let initial price be 100. New price = 125. To keep expenditure at 100, we use the formula: Reduction % = $[r / (100 + r)] \times 100$.

Step 3: Analysis
Reduction % = $[25 / (100 + 25)] \times 100 = (25 / 125) \times 100 = (1 / 5) \times 100 = 20%$.

Step 4: Conclusion
The homemaker must reduce consumption by 20% to maintain the same budget. Final Answer: (C)