UPSC Prelims 2021 CSAT Paper II · Q78 of 79 Basic Numeracy easy

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 ?

  1. (a) 0% ✓ UPSC's answer
  2. (b) 5% increase
  3. (c) 5% decrease
  4. (d) Cannot be determined due to insufficient data

Why the answer is (a)

• Let the original price of the article be 100.

• A 20% decrease reduces the price to 100 - 20 = 80.

• A subsequent 25% increase on the new price of 80 is calculated as 25% of 80, which equals 20.

• The final price becomes 80 + 20 = 100.

• Since the final price (100) is equal to the original price (100), the net change is 0%.

Why the other options are wrong

(b) 5% increase
A 5% increase would imply a final price of 105, which contradicts the calculation resulting in 100.
(c) 5% decrease
A 5% decrease would imply a final price of 95, which contradicts the calculation resulting in 100.
(d) Cannot be determined due to insufficient data
The net change can be determined because percentage changes are relative to the current value, allowing the final price to be calculated from any initial value.

Asked in the CSAT Paper II of the UPSC Civil Services Preliminary Examination 2021, held on 10 October 2021. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.

Reading the answer is not the same as getting it right under a clock. Practise this question with UPSC's negative marking, and anything you miss goes into an error notebook until you get it right twice.

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