Q-> The revenue of goods is the product of the no. of goods sold & price of each good. By what percentage the price of goods must increase to offset a 20% in the no. of goods sold.
Use numbers.
Say revenue (R) = 100. Since R = n * p, where n = # of goods sold and p = price, just choose some values for n and p, in this case why not n = 50 and p = 2.
R = n * p --> 100 = 50 * 2
Now, it is asking you how much should price increase if n goes down by 20%. So the first thing we need to do is find the new price that is necessary to maintain the same revenue. Since we know that R = 100, and 20% off of n = 50 is 10, our new n = 40.
R = n_new * p_new --> 100 = 40 * p_new --> p_new = 2.5
Now compare the increase in price of the new and the old.
(p_new - p)/ p = (2.5 - 2)/2 = 25%.
