Problem Solving

Hi All,

We're told that the price of onions increases by 25%. We're asked by what percent the consumption should decrease so that the overall money spent onions is the same. This question can be solved in a couple of different ways, including by TESTing VALUES. We will need the Percent Change Formula either way though:

Percent Change = (New - Old)/(Old) = (Difference)/(Original)

IF we spent $100 on 100 onions, then....
the 25% increase in cost will increase the cost to $125 for 100 onions.
To reduce that $25 from the total, we would have to decrease the money spent by ($100 - $125)/($125) = -$25/$125 = -1/5 = a 20% decrease

Final Answer: C

GMAT assassins aren't born, they're made,
RichC

BTGmoderatorLU wrote:The price of onion increases by 25%, by what percent should a housewife reduces the consumption that expenditure on onions can be same as before?

A. 14.28
B. 16.66
C. 20
D. 25
E. 33.33

We can let the old price of onion be $1/lb and the new price is then $1.25/lb. We can also let the expenditure by the housewife on onions be $5. So with the old price, she can buy 5 lbs onion, but with the new price, she can only buy 4 lbs of onion. Therefore, the consumption on onions is reduced
by (5 - 4)/5 = 1/5 = 20%.

Answer: C