When the price of a commodity is increased by 25% in order to keep the expenditure remain same by how much percentage of the consumption should be decreased?

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Let, the expenditure on the product be Rs x.

Let, the earlier price of the commodity be Rs y/kg.

∴ Price of the commodity now = y + y × 25/100 = 1.25y

∴ Earlier consumption = x/y kg

∴ Consumption now = x/1.25y kg

∴ Reduction in consumption = x/y – x/1.25y = x/5y kg

∴ Required percentage = (x/5y)/(x/y) × 100% = 20%

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