Question

A merchant marks his goods at 25% above the cost price. Due to a slum in the market, his cost reduces by 5%. He thus offers a discount of 8% due to which the sales go up by 25%. Compute the change in the merchant's profit.​

Answer 1

Answer:

Let the cost price of each article be Rs. 100

and the number of pieces sold be x

Then, original selling price = Rs. 125

Original profit = Rs. [(125 - 100)x] = Rs. 25x

New selling price=92% of Rs. 125=Rs.(92100×125)Rs.=115

Number of articles sold now = 1.25x

New profit = Rs. [1.25x (115 - 95)] = Rs. 25x

Hence, the profit remains unchanged.