Question

A shopkeeper buys an item for Rs 2000 and marks it up by 50% to set the marked price. He then offers a 20% discount on the marked price. What is the profit earned by the shopkeeper?

• A. Rs 600
• B. Rs 500
• C. Rs 400
• D. Rs 700

Hint:

Remember: To calculate profit, find the selling price after applying the discount on the marked price, then subtract the cost price. Double-check percentage calculations.

Answer 1

The Correct Option is C

To solve the problem, we need to calculate the profit earned by the shopkeeper based on the cost price, markup, and discount.

1. Understanding the Concepts:

- Cost Price (CP): The price at which the item is purchased.
- Marked Price (MP): The price after marking up the cost price.
- Selling Price (SP): The price at which the item is actually sold after the discount.
- Profit: The difference between the selling price and the cost price.

2. Given Values:

Cost Price (CP) = Rs 2000
Markup = 50%
Discount = 20%

3. Calculating the Marked Price:

Marked Price = CP + 50% of CP = Rs 2000 + 50% of Rs 2000
= Rs 2000 + Rs 1000 = Rs 3000

4. Calculating the Selling Price:

Discount = 20% of Rs 3000 = Rs 600
Selling Price = Marked Price - Discount = Rs 3000 - Rs 600 = Rs 2400

5. Calculating the Profit:

Profit = Selling Price - Cost Price = Rs 2400 - Rs 2000 = Rs 400

Final Answer:

The profit earned by the shopkeeper is Rs 400.