Question

An uneducated 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 his actual profit on the sales?

Answer 1

Correct Answer: 2

Concept:

• Marked Price (MP) = Cost Price (CP) + Markup
• Selling Price (SP) = MP after discount

Step 1: Assume CP.
Let CP = 100
Step 2: Find Marked Price.
\[ \text{MP} = 100 + 50% = 150 \]
Step 3: Apply discount.
\[ \text{SP} = 150 - 25% \text{ of } 150 = 150 - 37.5 = 112.5 \]
Step 4: Find profit.
\[ \text{Profit} = 112.5 - 100 = 12.5 \]
Step 5: Find profit %.
\[ \frac{12.5}{100} \times 100 = 12.5% \]
Step 6: Option analysis.

• (A) 12%: Slight error $\times$
• (B) 12.5%: Correct \checkmark
• (C) 15%: Ignoring discount $\times$
• (D) 10%: Under-calculated $\times$
• (E) 11%: Incorrect $\times$

Conclusion:
Thus, the correct answer is
Option (B).