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The price of cooking oil has increased by 25%.By what percent should a family reduce the consumption of cooking oil so as not to increase the expenditure in this account?20%25%18%16%

Question

The price of cooking oil has increased by 25%.By what percent should a family reduce the consumption of cooking oil so as not to increase the expenditure in this account?20%25%18%16%

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Solution

To solve this problem, we need to find the percentage decrease in consumption that would offset the 25% increase in price.

Here are the steps:

  1. Let's assume the original price of the cooking oil is 1perunitandthefamilyoriginallyconsumes1unit.So,theoriginalexpenditureis1 per unit and the family originally consumes 1 unit. So, the original expenditure is 1.

  2. After the price increase by 25%, the new price becomes $1.25 per unit.

  3. To keep the expenditure the same (1),weneedtofindouthowmanyunitsofcookingoilthefamilycanbuyatthenewprice.So,wedividetheoriginalexpenditurebythenewprice:1), we need to find out how many units of cooking oil the family can buy at the new price. So, we divide the original expenditure by the new price: 1 / $1.25 = 0.8 units.

  4. This means the family should now consume 0.8 units of cooking oil to keep the expenditure the same.

  5. To find the percentage decrease in consumption, we subtract the new consumption from the original consumption, divide by the original consumption, and then multiply by 100%: ((1 - 0.8) / 1) * 100% = 20%.

So, the family should reduce their consumption of cooking oil by 20% to avoid an increase in expenditure.

This problem has been solved

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