A retailer marks all his goods at 50% above the cost price and thinking that he will still make 25% profit, offers a discount of 25% on the marked price. What is the actual profit he earns on his sales?

Question

Question

This question was previously asked in

UGC NET Paper 1: Held on 21st Oct 2022 Shift 2

Answer 1

The correct answer is 12.50%.
Important Points

Solution:

Let's assume that the cost price of the goods is Rs. 100.

The retailer marks all his goods at 50% above the cost price, so the marked price would be:

Rs. 100 + 50% of Rs. 100 = Rs. 150

The retailer thinks that he will still make a 25% profit, so he offers a discount of 25% on the marked price:

Discount = 25% of Rs. 150 = Rs. 37.50

Selling price = Marked price - Discount = Rs. 150 - Rs. 37.50 = Rs. 112.50

Now, let's calculate the profit:

Profit = Selling price - Cost price = Rs. 112.50 - Rs. 100 = Rs. 12.50

Therefore, the actual profit the retailer earns on his sales is Rs. 12.50 or 12.5% of the cost price.