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The price of an article increased by 25% due to which its sale decreased by 40%. Find the percentage decrease in the revenue generated.

Question

The price of an article increased by 25% due to which its sale decreased by 40%. Find the percentage decrease in the revenue generated.

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Solution

Step 1: Understand the problem

The problem is asking for the percentage decrease in revenue. Revenue is calculated as the product of the price and the quantity sold. In this case, the price of an article increased by 25% and its sale decreased by 40%.

Step 2: Calculate the new price and new quantity sold

If we assume the initial price of the article to be 100 units, after a 25% increase, the new price will be 125 units.

Similarly, if we assume the initial quantity sold to be 100 units, after a 40% decrease, the new quantity sold will be 60 units.

Step 3: Calculate the initial and new revenue

The initial revenue (Price x Quantity) is 100 x 100 = 10,000 units.

The new revenue (Price x Quantity) is 125 x 60 = 7,500 units.

Step 4: Calculate the percentage decrease in revenue

The decrease in revenue is 10,000 - 7,500 = 2,500 units.

The percentage decrease in revenue is (Decrease in Revenue / Initial Revenue) x 100 = (2,500 / 10,000) x 100 = 25%.

So, the percentage decrease in the revenue generated is 25%.

This problem has been solved

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