If the price of a commodity is decreased by 20% and its consumption is

Explanation

⇒ Let the original price of commodity be x ⇒ let the original amount consumed be y ⇒ Original expenditure = xy ⇒ Price decreased by 20% ⇒ New Price = x - 20% of x ⇒ New Price = x - 0.20x = 0.80x ⇒ Consumption increased by 30% ⇒ New amount consumed = y + 30% of y ⇒ New amount consumed = y + 0.30y = 1.30y ⇒ New expenditure = 0.80x x 1.30y ⇒ New expenditure = 1.04xy ⇒ Percentage change = [(1.04xy - xy) / xy] x 100 ⇒ Percentage change = 0.04x 100 ∴ Percentage change = 4% increase