Multiple choice

The price of wheat increases by 25%, by what percentage should the consumption be reduced for the total expenditure to be the same.

  1. 25%

  2. 40%

  3. 20%

  4. 5%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let original price = 100, consumption = 100, so expenditure = 10000. After 25% price increase, new price = 125. To keep expenditure at 10000: 125 × new consumption = 10000. New consumption = 80, so reduction = 20%. Check: 1.25 × 0.8 = 1 (expenditure unchanged).

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