Profit & Loss Question Answers

Profit, Loss and Discounts - CAT 2007

Question 4 the day : July 10, 2003
The question for the day is a sample practice problem in profit, loss, discounts, an Arithmetic Topic and the problem provides an understanding of the different terms such as Cost Price, List Price, Selling price and margins.

Question
A merchant marks his goods in such a way that the profit on sale of 50 articles is equal to the selling price of 25 articles. What is his profit margin?

1. 25%
2. 50%
3. 100%
4. 66.67%

Correct Answer - 100% profit. Choice (3)

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Explanatory Answer

Let the selling price per article be = Re. 1

Therefore, selling price of 50 articles = Rs.50

Profit on sale of 50 articles = selling price of 25 articles = Rs.25.

S.P = 50. Profit = 25. Therefore, CP = 50 - 25 = 25.

And % profit =  (profit/c.p)*100=(25/25)*100=100%