When the price of cloth was reduce by 25%, the quantity of cloth sold increased by 20%. What was the effect on gross receipt of the shop? ?->(Show Answer!)

1. When the price of cloth was reduce by 25%, the quantity of cloth sold increased by 20%. What was the effect on gross receipt of the shop?

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By: anil on 05 May 2019 02.25 am

Let initial Volume sold = $$x$$ units Original Selling Price = Rs. $$y$$ => Total Revenue = Volume $$ imes$$ Selling Price = $$xy$$ New Volume Sold = $$frac{120}{100} imes x=1.2x$$ units New Selling Price = $$frac{75}{100} imes y=Rs.$$ $$0.75y$$ => Total Revenue = $$1.20x imes 0.75y = 0.9xy$$ $$ herefore$$ % decrease in revenue = $$frac{(xy-0.9xy)}{xy} imes100$$ = $$0.1 imes100=10\%$$ => Ans - (D)

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