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Let’s assume cost of 1 liter of milk = Rs 100n
Hence the selling price of 1 liter of milk = Rs (1.1 X 100n) = Rs 110n
According to the question now 20% water is there in 1 liter of milk and water mixture hence amount of milk in the 1 liter of resulting mixture = 80% of 1 liter = 800 ml
Now price of the new mixture = 80% of 100n = 80n
Now in this case, Cost price = Rs 80n
Selling Price = Rs 110n
Hence profit % = (110n-80n)/80n X 100 = 37.5%
Now increase in percentage points = 37.5 – 10 = 27.5