The tax on a commodity is diminished by 20% and its consumption increased by 15%. The effect on revenue is_________?

A. It increases by 8%
B. It decreases by 8%
C. No change in revenue
D. It increases by 10%
E. None

100 * 100 = 10000
80 * 115 = 9200
———–
10000———–800
100———–? => 8% decrease

Correct Answer: It decreases by 8% ✔

Last Updated: February 07, 2020