On decreasing the price of a colour TV by 30 | vedclass

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Question

(A) Let the original price be $P$ and the original number of units sold be $N$. The original revenue is $R_1 = P 	imes N$.After the price decrease of

Vedclass · Accepted Answer

$16 \%$ decrease

Vedclass · Answer

(A) Let the original price be $P$ and the original number of units sold be $N$. The original revenue is $R_1 = P 	imes N$.After the price decrease of $30 \%$,the new price is $P' = P - 0.30P = 0.70P$.After the sale increase of $20 \%$,the new number of units sold is $N' = N + 0.20N = 1.20N$.The new revenue is $R_2 = P' 	imes N' = (0.70P) 	imes (1.20N) = 0.84 	imes (P 	imes N) = 0.84R_1$.The percentage change in revenue is given by the formula: $	ext{Net } \% 	ext{ change} = (x + y + \frac{xy}{100}) \%$,where $x = -30$ and $y = +20$.Substituting the values: $(-30 + 20 + \frac{-30 	imes 20}{100}) \% = (-10 - 6) \% = -16 \%$.$A$ negative sign indicates a decrease. Therefore,the revenue decreases by $16 \%$.

On decreasing the price of a colour $TV$ by $30 \%$,its sale is increased by $20 \%$. The effect on the revenue is:

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