CSAT 2021

Q. If the price of an article is decreased by 20% and then the new price is increased by 25%, then what is the net change in the price?

(a) 0%
(b) 5% increase
(c) 5% decrease
(d) Cannot be determined due to insufficient data
Correct Answer: (a) 0%

Question from UPSC Prelims 2021 CSAT Paper

Explanation :

Price of an article is decreased & increased by 20, 25

Given:
– Original price = P
– First change: 20% decrease
– Second change: 25% increase

Step 1: Calculate price after 20% decrease
– Decrease amount = 20% of P = 0.2P
– New price = P – 0.2P
– New price = 0.8P

Step 2: Calculate final price after 25% increase
– Increase amount = 25% of 0.8P = 0.25(0.8P) = 0.2P
– Final price = 0.8P + 0.2P
– Final price = 1P

Step 3: Calculate net percentage change
– Original price = P
– Final price = P
– Net change = (Final price – Original price)/Original price × 100
– Net change = (P – P)/P × 100
– Net change = 0%

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