Question

If tax on a commodity is reduced by 10%, total revenue remains unchanged. What is the percentage increase in its consumption?

• A. $11\frac{1}{9}\%$
• B. 20%
• C. 10%
• D. $9\frac{1}{11}\%$
• E. None of the above

Answer 1

The correct option is A $11\frac{1}{9}\%$

Percentage increase in the consumption
$=\frac{10}{100-10}\times 100=\frac{100}{9}=11\frac{1}{9}\%$