Price of milk is increased by 50%. Find by how much percent the consumption is reduced so as not to increase the expenditure?
Explanation:
Let the price of milk be = P and consumption = C.
New price of Milk = 1.5P and new consumption = C'.
New expenditure = initial expenditure
P × C = P' × C'
⇒ P × C = 1.5P × C'
⇒ C' = C/1.5 = 2C/3
Hence, new consumption is 2/3rd, i.e. reduces by 1/3rd = 33.33% reduction.
Alternately, Price becomes (1 + 50/100) = 3/2 times
For expenditure to remain constant, consumption should become 2/3 times.
∴ % change in consumption = (2/3 - 1) × 100% = 33.33%
Hence, option (e).
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