Question

Price of vegetable oil is increased by $25$% by how much present a house wife reduce his consumption so as not to increase his expenditure.

Answer 1

Let price of oil be $x$ and consumption be $y$

$\therefore$ Total expense $=xy$

Now, New price of oil $=x(1+\frac{25}{100})=\frac{5x}{4}$

Let new consumption $=z$

ATP,

$xy=\frac{5x}{4}\times z\Rightarrow z=\frac{4y}{5}$

$\therefore$ Reduce in consumption $=y-\frac{4y}{5}=\frac{y}{5}$

$\therefore \%$ Reduce $=\frac{\frac{y}{5}}{y}\times 100\%=20\%$