Profit and Loss – Markup followed by discount: The marked price is 10% higher than the cost price. A discount of 10% is then given on the marked price. In this sale, does the seller gain or lose, and by what percent?
Aptitude
Profit and Loss
Difficulty: Easy
Choose an option
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A1% loss
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B1% gain
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CNo profit, no loss
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D2% loss
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E2% gain
Answer
Correct Answer: 1% loss
Explanation
Introduction / Context:Successive percentage changes are multiplicative, not additive. A markup followed by an equal discount usually does not return to the original price.
Given Data / Assumptions:
- MP = 1.10 * CP
- Discount on MP = 10% ⇒ SP = 0.90 * MP
Concept / Approach:Compute SP relative to CP and compare.
Step-by-Step Solution:SP = 0.90 * (1.10 * CP) = 0.99 * CPHence, SP is 1% below CP ⇒ 1% loss
Verification / Alternative check:Let CP = 100; MP = 110; SP = 99; loss = 1.
Why Other Options Are Wrong:No-profit-no-loss is false because 0.99 ≠ 1. 1% gain and 2% effects are incorrect directions or magnitudes.
Common Pitfalls:Averaging +10% and -10% to get 0%.
Final Answer:1% loss