Revising the selling price target: An article’s selling price was fixed at ₹ 700 to include a 40% profit on cost. Due to low sales, the merchant decides to reduce the target to a 10% profit. What should be the new selling price?

Introduction / Context:Price targets tied to a profit percentage must be based on the same cost price. First recover CP from the initial pricing, then apply the new profit percentage to obtain the new SP.

Given Data / Assumptions:

• SP_initial = ₹ 700 at 40% profit ⇒ SP_initial = 1.40 * CP.
• New target = 10% profit on CP.

Concept / Approach:Compute CP from the first scenario and then SP_new = 1.10 * CP.

Step-by-Step Solution:CP = 700 / 1.40 = ₹ 500SP_new = 1.10 * 500 = ₹ 550

Verification / Alternative check:At ₹ 550, profit over ₹ 500 is ₹ 50, which is 10%, confirming the new target.

Why Other Options Are Wrong:

• ₹ 450 / ₹ 490 / ₹ 500: do not represent 10% profit on the recovered CP of ₹ 500.

Common Pitfalls:

• Applying 10% to the old SP instead of the cost price.

Final Answer:₹ 550