Define the variables

Let the initial price be 100 and initial consumption be 100. Expenditure is $100 \times 100 = 10000$. After a 25% price increase, the new price is 125.

$P_{new} = 125$

Set up the expenditure equation

To keep expenditure constant at 10000, the new consumption $C_{new}$ must satisfy $125 \times C_{new} = 10000$.

$C_{new} = \frac{10000}{125} = 80$

Calculate the percentage reduction

The reduction in consumption is $100 - 80 = 20$. The percentage reduction is $\frac{20}{100} \times 100$.

$\text{Reduction} = 20\%$