Compensating for a 25% price increase: By what percentage should a family reduce the use of cooking oil so that expenditure does not increase?

Introduction / Context:
To keep spending constant when prices rise, consumption must drop in inverse proportion to the price increase. This is a standard inverse relationship for fixed expenditure scenarios.

Given Data / Assumptions:

• Price increase = 25% ⇒ new price factor = 1.25 times old price.
• Budget (expenditure) is fixed.

Concept / Approach:
If P becomes 1.25P and expenditure is fixed, quantity Q must scale by 1 / 1.25 = 0.80. That corresponds to a 20% reduction (since 1 − 0.80 = 0.20).

Step-by-Step Solution:
New quantity factor = 1 / 1.25 = 0.80Required reduction = 1 − 0.80 = 0.20 = 20%

Verification / Alternative check:
Example budget B at old price P buys Q = B/P. At new price 1.25P, same B buys B/(1.25P) = 0.80 * (B/P), i.e., 20% less quantity.

Why Other Options Are Wrong:
15% and 10% are insufficient; 25% and 30% are excessive relative to the exact inverse factor 0.80.

Common Pitfalls:
Assuming the reduction equals the price increase; reductions for constant spend use the reciprocal, not a simple subtraction.

Final Answer:
20%