Consumption Problem

Suppose that, the person eat 100 pound of wheat for 100 dollars. The price falls 16%. The person now, eat 100 pound of wheat for 84 dollars.

By the proportion:

84 dollars is to 100 pounds

100 dollars is to x pounds

$100000=84x$

$x=119.0476...$ approximately 119.

You have +19% of wheat. The person now, can eat +19% of wheat for 100 dollars.

Let's say we are dealing with £100 of wheat (the price and amount are irrelevant, it's about the proportions).

The price falls 16%, so the same amount now costs £84.

To keep the budget the same as before, they can now eat £100 worth of wheat, which is 100/84 times the amount.

100/84 = 1.190476... which is 19% more than before.

Before price decrease:

Total Budget = price x quantity

After price decrease : Total Budget = 0.84 x price x quantity

If Budgets have to be equal --> quantity/0.84 --> 19% increase

(100 / 84) x 100% - 100 % = 19%

[16/(100-16)]x100=(16/84)x100=19.05 %

person eat x unit of price y budget = xy price falls 16%, new price 0.84 y let now he eats k % more or (1+.01k)x since budget before and after same (1+0.01k)x * 0.84y= xy 1+0.01k = 1/0.84 k = 100 (1/0.84-1)- 1600/84=19%

lets say, $100 old price - 1 kg

$84 new price - 1 kg ( 16% reduction )

$100 new price = 1/84 x 100= 1.19 kg

Consumption can increase by 19 %( 1 kg-1.19 kg ) w/o increasing budget

let 10 kg for 500$ , unit price 50$ , new unit price 50 - 0.16*50 = 42$ , for same budget quantity = 500/42 = 11.9 , % increase = (11.9 -10) * 100 / 10 = 19%

Write a solution. 1/(1- 0.16)

100/84 = 1.19, so 19% more

let his budget be X rs and rate of wheat Y rs/kg so, wheat intake= X/Y kg wheat price decrease by 16 % so, new price= .84Y rs/kg total wheat intake with same amount X/.84Y kg so, extra wheat in % =(1/.84) -1=19