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If prices reduce by 20% and sales increase by 15%, what is the net effect on gross receipts?
  • a)
    They increase by 8%.
  • b)
    They decrease by 8%. 
  • c)
    They remain the same.
  • d)
    They increase by 10%.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
If prices reduce by 20% and sales increase by 15%, what is the net eff...
Let original price = p, and original sales = s. Therefore, original gross receipts = ps.
Let new price = 0.80p, and new sales = 1.15s. Therefore, new gross receipts = 0.92ps.
Gross receipts are only 92% of what they were. Hence, gross receipts decrease by 8%.
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If prices reduce by 20% and sales increase by 15%, what is the net effect on gross receipts?a)They increase by 8%.b)They decrease by 8%.c)They remain the same.d)They increase by 10%.Correct answer is option 'B'. Can you explain this answer?
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