Thread: Need help understanding Net Change in Price.

What does net change in price mean ? There is a question on a standardized test which is:

A certain company increased its price by 30% during 1992 .Then in 1993 it was forced to cut back its prices by 20%. What was the net change in price

The answer is
"No Net change in price"

The term "net" means "after considering everything." So this is asking you to compare the price after the 30% increase and 20% decrease to the original price. Not sure what choices you were given, but it seems to me the answer is wrong. If the original price was $100 then after a 30% increase the new price was $130. Then when a 20% reduction is applied to the $130 figure the new "net" price is 80% of $130 = $104. So the net change in price is +4%.

@Ebaines
After reconfirming from another source , I guess the answer is
"A net increase in prices of 10% or less"

by the way the options are:
a)A net decrease in prices of more than 10%
b)A net decrease in prices of 10% or less
c)No net changes in prices
d)A net increase in prices of 10% or less.
e)A net increase in prices of more than 10%

Also are you saying that in order to solve questions like these we consider everything then consider the percentage change between the final value and the starting value. ?

Btw I also think the answer is d now

I agree it's "d."

And yes - "net" means to consider the last price against the starting value.