The price of a P&G product is collectively decided by five input factors viz. research, raw materials, labour, advertisements and transportation. The functional relationship of price with these factors is: Price = (k × Research costs × Raw material costs × Labour costs × Advertising cost × Transportation cost) if there are respective changes of 10%, 20%, -20%, 25% and 50% in the five factors, then find the change in the price of product.

 

  • Option 1)

     

    85%

     

  • Option 2)

     

    95%

     

  • Option 3)

     

    98%

     

  • Option 4)

     

    80%

     

  • Option 5)

     

    none of these

     

Answers (1)

Let initial Price be = 100

Final = 100\times \left ( \frac{110}{100} \right )\times \left ( \frac{120}{100} \right )\times \left ( \frac{80}{100} \right )\times \left ( \frac{125}{100} \right )\times \left ( \frac{150}{100} \right )

\Rightarrow 198

\Rightarrow  Change 198 - 100 = 98 %

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