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The price of cooking oil has increased by 25 %. The percentage of reduction that a farming should effect in the use of cooking oil so as not to increase the expenditure on this account is________?

Correct answer: B. 20 %

  • A. 15 %
  • B. 20 %
  • C. 25%
  • D. 30%

Explanation

Let the original price and quantity be Rs. 100 and 100 units, giving expenditure of Rs. 10,000. After a 25% price rise, the price is Rs. 125, so the required quantity is Rs. 10,000 / Rs. 125 = 80 units, a reduction of 20 units or 20%. The common distractor is option c, 25%, which assumes the quantity must fall by the same percentage as the price rises.

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