Shortcut Trick
If price increases by R%, reduction in consumption = [R ÷ (100 + R)] × 100%
Given, R = 7
⇒ Reduction % = [7 ÷ (100 + 7)] × 100%
⇒ Reduction % = (7 ÷ 107) × 100% = 700 ÷ 107 %
⇒ Reduction % = 6 58/107 %
∴ The correct answer is 6 58/107 %.
Alternate Method
Given:
Price increase of petrol = 7%
Formula Used:
Expenditure = Price × Consumption
Price Ratio:
Old Price: 100
New Price: 107
Consumption:
Old Cons.: 107
New Cons.: 100
Decrease: 7
% Decrease = (7 ÷ 107) × 100
Calculations:
⇒ Let original price = 100 units
⇒ New price after 7% increase = 100 + 7 = 107 units
⇒ To keep expenditure constant, the consumption ratio must be inversely proportional to the price ratio.
⇒ Ratio of Original Consumption to New Consumption = 107 : 100
⇒ Decrease in consumption = 107 − 100 = 7 units
⇒ Percentage decrease = (Decrease ÷ Original Consumption) × 100
⇒ Percentage decrease = (7 ÷ 107) × 100 = 700 ÷ 107 %
⇒ 700 ÷ 107 = 6 58/107 %
∴ The correct answer is 6 58/107 %.
Additional Information
Constant Expenditure Rule (Price Increase)
If the price of a commodity increases by R%, the percentage reduction in consumption required to keep the expenditure same is [R ÷ (100 + R)] × 100%.
Constant Expenditure Rule (Price Decrease)
If the price of a commodity decreases by R%, the percentage increase in consumption allowed to keep the expenditure same is [R ÷ (100 − R)] × 100%.
Successive Percentage Change
When a value changes by A% and then by B%, the net percentage change is given by (A + B + AB ÷ 100)%.