A store increased the price of an item by 20%. By what percentage must the new price be decreased to restore the original price?

✓ Correct Answer: Option B

Let the original price be P. The new price is 1.2P. To restore P, the decrease needed is 0.2P. The percentage decrease from the new price is (0.2P / 1.2P) * 100% = (1/6) * 100% = 16 2/3%.