The price of edible oil is increased by `25%` and to maintain the Budget Rahul reduces the consumption by `20%`. Then the expenditure change is ?

Options

A. `44%`
B. `24%`
C. `20%`
D. No change

Answer

To solve the problem step-by-step, let's break it down:

### Step 1: Understand the Initial Price and Consumption
Let’s assume the initial price of edible oil is `100` (this makes calculations easier).

### Step 2: Calculate the New Price After the Increase
The price of edible oil is increased by `25%`.
- New Price = Initial Price + (25% of Initial Price)
- New Price = 100 + (25/100 * 100) = 100 + 25 = `125`

### Step 3: Calculate the Initial Expenditure
Assuming Rahul initially consumed `1 liter` of edible oil at the price of `100`, his initial expenditure is:
- Initial Expenditure = Price * Quantity = 100 * 1 = `100`

### Step 4: Calculate the New Consumption After Reducing by 20%
Rahul reduces his consumption by `20%`.
- New Consumption = Initial Consumption - (20% of Initial Consumption)
- New Consumption = 1 - (20/100 * 1) = 1 - 0.2 = `0.8 liters`

### Step 5: Calculate the New Expenditure
Now, we calculate the new expenditure with the new price and new consumption.
- New Expenditure = New Price * New Consumption
- New Expenditure = 125 * 0.8 = `100`

### Step 6: Determine the Change in Expenditure
Now, we compare the initial and new expenditures.
- Change in Expenditure = New Expenditure - Initial Expenditure
- Change in Expenditure = 100 - 100 = `0`

### Conclusion
The expenditure change is `0`, meaning there is no change in expenditure.

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