The price of a chair is reduced by 5%. The number of chairs sold increases by 12%. What is the effect on the sales?

Let the original selling price of each chair = Rs. X and number of chairs = y

Then, original selling price of y chairs = xy

So, x*y = xy

On reducing price by 5% and increasing number of chairs by 12%,

(95x/100)*(112y/100) = 1064xy/1000,

So, increase in selling price = 1064xy/1000 – xy

= 64xy/100

Percentage increase in selling price = 64xy*100/1000*xy

= 6.4%