Given:
Percentage increase in price = 25%
Concept:
Expenditure is the product of the price and the consumption.
E = C × P
If only percentage value is given, consider any numerical value of the initial price and consumption to keep the calculation easy.
Solution:
The expenditure is same in both the cases
Let the Initial price of oil = 100/-
Let the consumption of oil = 100 unit
New Price of oil = 100 + (25/100) × 100
= 125/-
(Initial price of) × (consumption of oil) = (New Price of oil) × (New Consumption)
⇒ 100 × 100 = 125 × (New Consumption)
⇒ New Consumption = (100 × 100)/125
⇒ New Consumption = 80 unit
Percentage reduction in consumption = [(100 - 80)/100] × 100 = 20%
∴ Percentage reduction in consumption is 20%
Percentage = r/(100 + r) × 100
Percentage = 25/(100 + 25) × 100 = 20%
∴ Percentage reduction in consumption is 20%