atulmangal wrote:If price decreases by 25%, by what % should consumption increase so that the expenditure does not increase?
Hi!
This question is waaaay too ambiguous for the actual GMAT (what do consumption/expenditure actually mean?), but we understand the general thrust, which is a concept that the GMAT definitely tests. In the future, please make sure you include the answer choices and the source of every question that you post.
For this type of question, picking numbers is a great way to solve.
Assuming I'm translating the question correctly:
expenditure = price * consumption
(more commonly phrased as revenue/total cost = price * quantity)
We want to know what happens to consumption when expenditure remains constant and price decreases by 25%.
So, let's let:
expenditure = $100
price = 1.00
consumption = c
100 = 1.00 * c
100 = c
Now, price goes down by 25%:
100 = .75 * (new c)
100 = 3/4 (new c)
(4/3)100 new c
c has gone from 100 to (4/3)100, so c has increased by 1/3.
Picking numbers (based on 100) is almost always the quickest way to solve percent problems with unknown values.
