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Question

Due to increase of 15% in the price of milk, a family reduces its consumption of milk by 15%. What was the effect on expenditure of that family on account of milk?
  1. 2.50% decrease
  2. 2.25% decrease
  3. 3.5% decrease
  4. 3% decrease

A
3% decrease
B
2.50% decrease
C
2.25% decrease
D
3.5% decrease
Solution
Verified by Toppr

Let us assume that,
Milk consumed by family initially =x
Price of milk initially =y
Total expenditure on milk =xy

There's a 15% increase in price of milk
New price of milk =1.15y
Also, a 15% reduction in consumption of milk by family
Milk consumed by family =0.85x

Total expenditure on milk =1.15y×0.85x
=0.9775xy

% Decrease in expenditure =xy0.9775xyxy×100=2.25%

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