Discussion

Explanation:

Let P be the price/unit (Rs./ unit), E be the expenditure (Rs.) and C be the consumption in units.

Then, E = P × C (Rs./unit . unit)

Now,

Price has reduced by 40% ⇒ New price = 0.6P.

Expenditure remains same i.e. E

Let new consumption be C’

⇒ New expenditure = E = P' × C'

⇒ P × C = 0.6P × C'

⇒ C' = C/0.6 = 5C/3 = 1.667C 

⇒ C' is $66\frac{2}{3}$% more than C.

Alternately,
Price becomes $\left(1-\frac{40}{100}\right)$ = $\frac{3}{5}$ times.

∴ For Expenditure to remain constant, Consumption should become $\frac{5}{3}$ times

∴ % change in consumption = $\left(\frac{5}{3}-1\right)\times 100$ = $66\frac{2}{3}$%

Hence, option (a).

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