# Thread: Need help understanding Net Change in Price.

1. ## 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
"No Net change in price"

2. ## 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%.

3. ## 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

4. ## 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.