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The price of a commodity increases from 5 per unit in 1990 to 7.50 per unit in 1995 andthe quantity consumed decreases from 120 units in 1990 to 90 units in 1995. The price andquantity in 1995 are 150% and 75% respectively of the corresponding price and quantityin 1990. Therefore, the product of the price ratio and quantity ratio is ? (a) 1.8 (b) 1.125 (c) 1.75 (d) None of these.?
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The price of a commodity increases from 5 per unit in 1990 to 7.50 per...
Solution:

Given,
Price in 1990 (P1) = 5
Price in 1995 (P2) = 7.50
Quantity in 1990 (Q1) = 120
Quantity in 1995 (Q2) = 90

Price ratio = P2/P1 = 7.50/5 = 1.5
Quantity ratio = Q2/Q1 = 90/120 = 0.75

We need to find the product of price ratio and quantity ratio, i.e.,
Price ratio * Quantity ratio = 1.5 * 0.75 = 1.125

Therefore, the product of the price ratio and quantity ratio is 1.125, which is option (b).

Explanation:

To find the product of price ratio and quantity ratio, we need to first calculate the price ratio and quantity ratio using the given data. The price ratio is the ratio of prices in 1995 and 1990, while the quantity ratio is the ratio of quantities in 1995 and 1990. Once we have calculated the price and quantity ratios, we can simply multiply them to get the required product.

In this case, the price ratio is 1.5, which means that the price increased by 50% from 1990 to 1995. The quantity ratio is 0.75, which means that the quantity consumed decreased by 25% from 1990 to 1995. Multiplying these ratios, we get the product of 1.125, which indicates that the overall effect of the price increase and quantity decrease on the product is a decrease of 12.5%.
Community Answer
The price of a commodity increases from 5 per unit in 1990 to 7.50 per...
7.5*90 divided by 5*120=1.125
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The price of a commodity increases from 5 per unit in 1990 to 7.50 per unit in 1995 andthe quantity consumed decreases from 120 units in 1990 to 90 units in 1995. The price andquantity in 1995 are 150% and 75% respectively of the corresponding price and quantityin 1990. Therefore, the product of the price ratio and quantity ratio is ? (a) 1.8 (b) 1.125 (c) 1.75 (d) None of these.?
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The price of a commodity increases from 5 per unit in 1990 to 7.50 per unit in 1995 andthe quantity consumed decreases from 120 units in 1990 to 90 units in 1995. The price andquantity in 1995 are 150% and 75% respectively of the corresponding price and quantityin 1990. Therefore, the product of the price ratio and quantity ratio is ? (a) 1.8 (b) 1.125 (c) 1.75 (d) None of these.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The price of a commodity increases from 5 per unit in 1990 to 7.50 per unit in 1995 andthe quantity consumed decreases from 120 units in 1990 to 90 units in 1995. The price andquantity in 1995 are 150% and 75% respectively of the corresponding price and quantityin 1990. Therefore, the product of the price ratio and quantity ratio is ? (a) 1.8 (b) 1.125 (c) 1.75 (d) None of these.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The price of a commodity increases from 5 per unit in 1990 to 7.50 per unit in 1995 andthe quantity consumed decreases from 120 units in 1990 to 90 units in 1995. The price andquantity in 1995 are 150% and 75% respectively of the corresponding price and quantityin 1990. Therefore, the product of the price ratio and quantity ratio is ? (a) 1.8 (b) 1.125 (c) 1.75 (d) None of these.?.
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