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If cost of sugar increases by 25%. How much percent consumption of sugar should be decreased in order to keep expenditure fixed?

Correct answer: C. 20%

  • A. 10%
  • B. 15%
  • C. 20%
  • D. 25%
  • E. None

Explanation

Keep expenditure fixed by making the consumption factor the reciprocal of the price factor. A 25% price increase gives a price factor of 1.25, so consumption must become 1/1.25 = 0.8, meaning a decrease of 20%. The likely trap is 25%, which reduces consumption by the same percentage as the price increase instead of accounting for the changed price.

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Percentages express a quantity as parts per hundred and support calculations involving increases, decreases, discounts, commissions, taxes, and successive changes. Questions require distinguishing percentage change from percentage points and identifying the original value when a final value and its percentage change are given.

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