Question

Two merchants sell each an article for Rs. 1,000. If Merchant A computes his profit on cost price, while Merchant B
computes his profit on the selling price, they end up making profits of 25% respectively. By how much is the profit
made by Merchant B greater than that of Merchant A?​

Answer 1

Merchant B computes his profit as a percentage of selling price. He makes a profit of 25% on selling price of Rs. 1000 i.e. his profit =25% of 1000= Rs. 250.

Merchant A computes his profit as a percentage of cost price.

Therefore, when he makes a profit of 25% or 1/4th of his cost price, then his profit expressed as a percentage of selling price = or 20% of selling price.

So, merchant A makes a profit of 20% of Rs. 1000= Rs. 200.

Merchant B makes a profit of Rs. 250 and merchant A makes a profit of Rs. 200.

Hence, merchant B makes Rs. 50 more profit than merchant A.