By selling two dozen daisies for Rs 325, a florist loses 25%. Find his gain or
loss if he sells each daisy for Rs 20 each.
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Answer:
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The florist, who is some sort of economic genius from Bizarro World, pays 325*1.25=$406.25 for 24 roses, which he sells at a loss for $325.
If he’d listened to his business advisor, he would have sold singles for $20 each, because of course people are going to pay $20 for a daisy despite the going rate being closer to $2. But hey, wait, those roses only cost him 406.25/24 each, and he’s selling them for $20 each, why, he’s now making a profit of $3.07 each, instead of LOSING $3.38+ each with his two dozen flower discount.
Since we haven’t discussed payroll, rents, overhead, spoilage, shrinkage, insurance, advertising, or any of the rest of his costs, the bitter truth is it doesn’t matter, he’s going bankrupt soon.
And part of the reason is that he’s paying not merely well over wholesale, but well over retail for his product, and then planning on selling at a severely discounted markup that’s still far above market value.