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Simple/Compound % Change
When the price of a toy was increased by 20%, the number of toys sold decreased by 15%. What was the effect on the sales revenue of the shop?
Explanation and memory cue
When the price of a toy is increased by 20%, the new price factor is 1.20. When the number of toys sold decreases by 15%, the new quantity factor is 0.85. The overall effect on sales revenue is the product of these two factors: 1.20 × 0.85 = 1.02, which means a 2% increase in sales revenue. Therefore, the sales revenue increases by 2%, corresponding to option C.