If the price of a commodity is increased by 30%, by how much % a consumer must reduce his consumption so to keep the expenditure same ?a)100/13b)200/13c)300/13d)400/13Correct answer is option 'C'. Can you explain this answer?

Question

Answer

Given that the price of a commodity is increased by 30%.

Let the initial price of the commodity be P and the initial consumption be Q.

Then, the initial expenditure = P*Q

After the price increase, the new price = P + (30/100)*P = 1.3P

To keep the expenditure same, the new consumption should be reduced to a certain extent.

Let the new consumption be x.

Then, 1.3P*x = P*Q

Solving for x, we get x = Q/1.3

The percentage reduction in consumption = [(Q-x)/Q]*100

= [(Q-Q/1.3)/Q]*100

= (0.3/1.3)*100

= 300/13%

Therefore, the consumer must reduce his consumption by 300/13% to keep the expenditure same.

Hence, option (c) is the correct answer.

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