Question

The price of sugar rises by 25%. By what percentage must a family reduce its consumption so that its expenditure on sugar stays the same?

• A. 16.67%
• B. 20%
• C. 25%
• D. 22.5%

Hint:

Try assuming a simple round number for the original price and quantity, then see what new quantity keeps the expenditure unchanged.

Answer 1

The Correct Option is B

Required reduction \(=\frac{\text{rise}}{100+\text{rise}}\times 100 = \frac{25}{125}\times 100 = 20\%\). (Check: let base 100 at price 1 = expenditure 100; at price 1.25, consume 80 gives \(1.25\times 80=100\).) Correct option: 20%.