A restaurant sells cakes at an original price of Rs. 12 each and earlier sold 250 cakes per day. It introduces a promotion offering a 20% discount on the price of each cake. After the promotion, daily sales of cakes increase by 18% in quantity. Compared to the original daily revenue from cakes, how much more or less money does the restaurant now make each day from cake sales?

Introduction / Context:
This problem tests understanding of the combined impact of a price discount and a demand increase on total revenue. It mimics real life business scenarios, where lowering the price can boost sales volume, and you must determine whether total revenue rises or falls. The key is to treat revenue as price multiplied by quantity and compare the before and after cases.

Given Data / Assumptions:

Original price per cake = Rs. 12.

Original number of cakes sold per day = 250.

New discount offered = 20% off the original price.

After the discount, number of cakes sold per day increases by 18%.

We assume these are the only changes; costs and other factors stay the same.

Concept / Approach:
Compute original revenue per day as original price times original quantity. Then compute the new price after a 20% discount and the new quantity after an 18% increase. Multiply these to obtain the new daily revenue. The difference between new revenue and original revenue tells us how much more or less the restaurant makes each day.

Step-by-Step Solution:
Step 1: Original price per cake = Rs. 12.Step 2: Original number of cakes sold per day = 250.Step 3: Original revenue = 12 * 250 = Rs. 3000 per day.Step 4: New price after 20% discount = 12 * (1 − 20 / 100) = 12 * 0.80 = Rs. 9.6 per cake.Step 5: New quantity after 18% increase = 250 * (1 + 18 / 100) = 250 * 1.18 = 295 cakes per day.Step 6: New revenue = 9.6 * 295.Compute: 9.6 * 295 = 2832.Step 7: Change in daily revenue = new revenue − original revenue = 2832 − 3000 = −168.Step 8: Negative sign indicates a loss of Rs. 168 per day.

Verification / Alternative check:
Express new revenue as a factor of old revenue. Price factor = 0.80 due to 20% discount. Quantity factor = 1.18 due to 18% increase in sales. Combined revenue factor = 0.80 * 1.18 = 0.944. So new revenue is 94.4% of old revenue. 94.4% of 3000 = 0.944 * 3000 = 2832. The loss is 3000 − 2832 = 168, which matches the previous method.

Why Other Options Are Wrong:
Rs. 185 less and Rs. 150 less do not arise from the actual product of price and quantity changes.
Rs. 202 more and Rs. 175 more would imply that revenue increased, which contradicts both the factor calculation and the direct computation.

Common Pitfalls:
Common errors include subtracting 20% and adding 18% directly to the revenue, instead of adjusting both price and quantity first and then multiplying. Another mistake is to miscalculate the updated quantity or to forget that the 18% increase applies to the original 250 cakes. Always treat revenue as the product of price and quantity and apply separate percentage changes correctly to each factor.

Final Answer:
After the promotion, the restaurant makes Rs. 168 less per day from cake sales.