Question
Download Solution PDFWhen the price of a laptop was decreased by 20%, the number sold increased by 50%. What was the effect on the total revenue?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFGiven:
The price of a laptop was decreased by 20%, and the number sold increased by 50%.
Formula used:
Total Revenue = Price × Quantity Sold
Calculation:
Let the original price be P and the original quantity sold be Q.
Original Revenue = P × Q
New Price = P - 0.2P = 0.8P
New Quantity Sold = Q + 0.5Q = 1.5Q
New Revenue = New Price × New Quantity Sold
⇒ New Revenue = 0.8P × 1.5Q = 1.2PQ
⇒ Change in Revenue = New Revenue - Original Revenue
⇒ Change in Revenue = 1.2PQ - PQ = 0.2PQ
⇒ Percentage Change in Revenue = (0.2PQ / PQ) × 100 = 20%
∴ The correct answer is option (3).
Last updated on Mar 19, 2025
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