Discussion
How much does the sarees sales revenue of Uday increase, if Uday announces 25% discount on sarees and the saree sales volume increase by 40%?
Answer: B
Revenue is price multiplied by volume, so scale each by its own factor.
\[ \text{price factor} = 1 - 0.25 = 0.75, \qquad \text{volume factor} = 1 + 0.40 = 1.40 \]
\[ \text{revenue factor} = 0.75 \times 1.40 = 1.05 \]
\[ \text{change} = 1.05 - 1 = 0.05 = 5\% \text{ increase} \]
Subtracting the percentages (\( 40\% - 25\% = 15\% \)) is wrong because they act on different bases; the product is what matters. The revenue would be unchanged only if volume rose by \( \tfrac{1}{0.75} - 1 = 33.3\% \).
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