The price of an edible oil is increased by 45%. To maintain the budget, Rekha reduces the consumption of this oil by 20%. Find the increase in expenditure due to this edible oil.

Price of edible oil increased by 45%.

Consumption reduced by 20%.

The expenditure on a commodity is given by:

Expenditure = Price per unit × Quantity consumed

The percentage change in expenditure is calculated as:

Net change in expenditure = $$\text{Change in price} + \text{Change in quantity} + \left(\frac{\text{Change in price} \times \text{Change in quantity}}{100}\right)$$​​

Here, a price increase is positive, and a decrease in quantity is negative.

Net change in expenditure = $$45 - 20 + \frac{45 \times (-20)}{100}$$​ = 45 – 20 – 9 = 16 %

Thus, the increase in expenditure due to the edible oil is 16%.