If price of a commodity increases by 25% while quantity consumed decreases by 20%, total expenditure on the commodity:

Type: MCQ • Marks: 1

A. Remains unchanged

B. Increases by 5%

C. Increases by 10%

D. Decreases by 5%

Explanation

New Expenditure = (1.25 * P0) * (0.80 * Q0) = (1.25 * 0.80) * (P0 * Q0) = 1.00 * (P0 * Q0). Expenditure remains unchanged.

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UP TGT Mathematics

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