Water tax is increased by 40% but its consumption is decreased by 40%. The increase or decrease in the expenditure is? Pick one:
A) 16% decrease
B) 16% increase
C) 8% decrease
D) 8% increase
E) None of these
Since Tax x Consumption = Expenditure .   Therefore, Net % change in expenditure   = ( x + y + xy/100) %   = [40 - 40 + (40 x - 40)/100]% or -16%.   Therefore, expenditure decreased by 16%.   16% decreaseNSWER:16% decrease
<result>A</result>
Water tax is increased by 40% but its consumption is decreased by 40%. The increase or decrease in the expenditure is?