The question asks "what was the net effect on the sale?" and tells us "the sale increased by 80%". So the answer is 80%. There's a problem with the wording of the question.

The question surely means to ask "what was the effect on the revenue". This is a pure ratio question, so you can just invent numbers if you like - the answer will be the same for any numbers you choose. So you could imagine at first 10 items were sold for $10 each, for $100 revenue. Then after the percent changes, 18 items were sold for $8 each, for $144 revenue, a 44% increase.

Or you can use algebra: if n items are sold for $p each, revenue is $np. If we reduce the price by 20%, the new price is 0.8p. If we increase the number sold by 80%, the new number sold is 1.8n. So the new revenue is (0.8p)(1.8n) = 1.44np, which is 1.44 times the old revenue, so is 44% greater.
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The answer is A

Simply put

=(1.8x0.8) - 1

= 1.44 - 1
= 0.44

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HI All,

This question is poorly-worded, but the intent is to compare the 'before revenue' to the 'after revenue' in terms of percentage change...

We're told that decreasing the price of an item by 20% led to an increase of 80% in total number of that item sold. This question can be solved by TESTing VALUES.

IF...
Original Price = $100/unit
Original Number sold = 100 units
Total Revenue = ($100)(100) = $10,000

New Price = $100 - (.20)($100) = $80/unit
New Number sold = 100(1.8) = 180 units
Total Revenue = ($80)(180) = $14,400

Percent Change = (new - old)/(old) = (14,400 - 10,000)/10,000 = 4,400/10,000 = 44/100 = 44% increase in revenue

Final Answer:

GMAT assassins aren't born, they're made,
Rich
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S.P reduced to 80 from 100
Sell increase by 80% i.e. 1.8 Times
New sales = 0.8 *1.8 = 1.44
Net effect on sales 44% increase.

\(-20 + 80 + \frac{(-20)(80)}{100}\)

= \(60 - 16\)

= 44 % Increase , thus Answer must be (B)
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