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The tax on a commodity is diminished by 20% but its consumption is increased by 10%. Find the decrease percent in the revenue derived from it?
- A20%
- B18%
- C15%
- D12%
Correct answer: D
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0
CCommunity
12%
NA
NA
0
CCommunity
Solution:
Formula: Revenue = Tax × consumption
Let us take tax = 100 and consumption=100
Tax is diminished by 20% => 100 - 20 = 80
Consumption is increased by 10% => 100 + 10 = 110
Original Revenue = 100 × 100 = 10000
Changed Revenue = 80 × 110 = 8800
So, there is a loss in the revenue.
Revenue loss = 10,000 - 8,800 = 1200
Decrease percentage = ( 1200/10,000)× 100 = 12%
So, the correct option is D). 12%
Formula: Revenue = Tax × consumption
Let us take tax = 100 and consumption=100
Tax is diminished by 20% => 100 - 20 = 80
Consumption is increased by 10% => 100 + 10 = 110
Original Revenue = 100 × 100 = 10000
Changed Revenue = 80 × 110 = 8800
So, there is a loss in the revenue.
Revenue loss = 10,000 - 8,800 = 1200
Decrease percentage = ( 1200/10,000)× 100 = 12%
So, the correct option is D). 12%