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The price of an edible oil is increased by 25%. To maintain the budget, Sushma reduces the consumption of this oil by 20%. The increase in expenditure due to this edible oil is:
0
1
2
3
- Initially, let's assume Sushma was spending 100 units on the edible oil.
- The price of the oil increases by 25%, so the new price is 125 units.
- To maintain her budget, Sushma reduces her consumption by 20%.
- Reducing consumption by 20% means she consumes 80% of her initial quantity.
- Her new expenditure becomes 125 units (new price) × 0.8 (80% of the original quantity) = 100 units.
- As a result, Sushma’s expenditure remains the same.
Thus:
- Correct Answer: Option 1 - 0
By: Parvesh Mehta ProfileResourcesReport error
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