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A television manufacturing company has decided to increase the sale to beat the economic slowdown. It decides to reduce the price of television sets by 25% as a result of which the sales increased by 20%. What is the effect on the total revenue of the company?

Decreased by 20%
Increased by 20%
Increased by 10%
Decreased by 10%
Explanation:

Let the initial Price = Rs.100 and initial sales = 100
So, the initial revenue = Rs. 10000
Now, the price is reduced to 25% which is equal to Rs.75 and Sales is increased by 20% which is equal to 120.
Now new revenue = 120 x 75 = Rs. 9000
Change in revenue = (10000 - 9000) = Rs.1000 decrease
% decrease = (1000/10000) x 100 = 10%
Hence, the correct option is decrease of 10%.

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