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If the price of rice is raised by 20%, then by what percentage should a person reduce his consumption of...

17. If the price of rice is raised by 20%, then by what percentage should a person reduce his consumption of rice so that his expenditure remains the same? (correct to one decimal place)
(1) 14.7%
(2) 16.7%
(3) 12.7%
(4) 18.7%

Answer

Answer: (2) 16.7%

Explanation: If the price increases by 20%, the new price is 120% of the original. To keep the expenditure the same, the consumption should be reduced to 100/120 of the original, which is approximately 83.3%. The reduction percentage is 100% - 83.3% = 16.7%.

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