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The price of coffee is increased by 15% and a house wife reduced her consumption of coffee by 15% and hence her expenditure on coffee?

Remains unchanged
Increased by 4%
Decreased by 4%
Decreased by 2.25%

Correct Answer: Decreased by 2.25%

Explanation:

Consumption Decreases = (common %)²/100
= 225/100
= 2.25%.

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