T he given question is a GMAT 600 level problem solving question in Percentages.The concept tested in this GMAT sample question is that of percentage increase in price leading to a corresponding percent decrease in quantity.

Question 5: If the price of gasoline increases by 25% and Ron intends to spend only 15% more on gasoline, by what % should he reduce the quantity of petrol that he buys?

- 10%
- 12.5%
- 8%
- 12%
- 6.66%

@ INR

The best way to solve questions that provide all information in percent terms is to assume something to be 100.

Amount spent on gasoline = Price × Quantity

In this case, let us take the initial price per unit of gasoline to be $100.

Let Ron buy 1 unit of gasoline at this price.

So, amount spent by Ron = 1 × 100 = $100

Price increases by 25%.

Therefore, new price per unit = $100 + 25% of 100 = $125

Ron intends to increase the amount he spends on gasoline by only 15%.

Amount Ron is willing to spend on gasoline = $100 + 15% of 100 = $115.

Amount spent on gasoline = Price × Quantity

Let the new quantity of gasoline that he can get for $115 be 'q'.

125 × q = 115

Or q = \\frac{115}{125}) = \\frac{23}{25})

Before the price increase, he was able to get **1 unit**. Now, he will get only **\\frac{23}{25}) ** units.

So, he gets (1- \\frac{23}{25})) = \\frac{2}{25}) units lesser after the price increase.

Percentage reduction in quanity of gasoline he can buy = \\frac{\text{Decrease in quantity}}{\text{Initial quantity}}) × 100

= \\frac{\frac{2}{5}}{1}) × 100 = 8%

**Percentage reduction in gasoline consumption = 8%**

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