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Math Help - Need help understanding Net Change in Price.

  1. #1
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    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"
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  2. #2
    Super Member ebaines's Avatar
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    Re: Need help understanding 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%.
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  3. #3
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    Re: Need help understanding Net Change in Price.

    @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
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  4. #4
    Super Member ebaines's Avatar
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    Re: Need help understanding Net Change in Price.

    I agree it's "d."

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