UGC NET Questions (Paper – 1)

Let the original price be 100 units. A 10% decrease takes it to 90. A further 10% decrease is now applied to 90, resulting in a reduction of 9, so the new price is 81. The overall decrease from 100 to 81 is 19 units, which is a 19% reduction. This shows that successive equal percentage decreases do not simply add arithmetically.

Option A:
Option A, 19%, correctly reflects the multiplicative effect of two successive 10% decreases. It uses the idea that the combined factor is 0.9 × 0.9 = 0.81, corresponding to a 19% drop.

Option B:
Option B, 20%, comes from the mistaken belief that decreases add directly (10% + 10%), but this ignores that the second decrease is on an already reduced base.

Option C:
Option C, 21%, overestimates the net effect and does not correspond to the computed final value of 81.

Option D:
Option D, 25%, greatly overstates the combined impact and has no support in the actual price sequence produced by the successive reductions.