Reduction in consumption = [((R/(100+R))*100]%
This formula calculates the percentage reduction in consumption needed to prevent an increase in expenditure.
R represents the percentage increase in price.
For example, if the price of kerosene oil increased by 25%, then R would be 25.
The formula first calculates the new price as a percentage of the original price by adding the percentage increase to 100%.
In other words, it calculates (100+R)%. For the example with a 25% increase in price, this would be 125%.
Next, the formula divides the percentage increase in price by the percentage of the new price, which gives the ratio of the increase in price to the new price.
For the example with a 25% increase in price, this would be (R/100+R) = (25/125).
Finally, the formula multiplies this ratio by 100% to express it as a percentage.
For the example with a 25% increase in price, this would be [(25/125)*100]% = 20%.
So, the formula gives you the percentage reduction in consumption needed to prevent an increase in expenditure when the price of a product increases by a certain percentage.