Question

Price of a commodity falls by 20%. By what percent should it be raised to get back to the same level?

• A. 20%
• B. 25%
• C. 15%
• D. none of these

Hint:

When a value decreases by \( x% \), the required increase to restore it is always more than \( x% \). Always calculate the increase on the reduced value.

Answer 1

The Correct Option is B

Step 1: Assume the original price.
Let the original price of the commodity be 100 units.
Step 2: Calculate the reduced price after 20% fall.
A fall of 20% on 100 means the price decreases by 20 units.
New price = \( 100 - 20 = 80 \) units.
Step 3: Find the increase required to reach the original price.
To return to the original price of 100 from 80, the increase required is:
\[ 100 - 80 = 20 \]
Step 4: Calculate the required percentage increase.
The increase is calculated on the reduced price (80).
\[ \text{Required percentage increase} = \frac{20}{80} \times 100 = 25% \]
Step 5: Conclusion.
The price should be increased by 25% to return to the original level.