Question 370472: The price of a product is reduced by 12%. By what percentage must the sales grow, if the profit should be the same.
Please help by explanation or just a rule
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! The price of a product is reduced by 12%. By what percentage must the sales grow, if the profit should be the same.
Please help by explanation or just a rule
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Assume original price was "p" and # sold was "x"
Then original revenue was px.
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Reduced price = 0.88p
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Equation:
New revenue must equal old revenue
(0.88p)y = px where y is the new number of items sold
y = (px)/(0.88p)
y = x/0.88
y = 1.1364 x
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The number of items sold must increase by 13.64%
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Cheers,
Stan H.
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