Question

Q34) A merchant sells an item at a 20% discount, but still makes a gross profit of 20 percent of the cost. What percent of the cost would the gross profit on the item have been if it had been sold without the discount?

• A. (a) 20%
• B. (b) 40%
• C. (c) 50%
• D. (d) 60%

Answer 1

The correct option is C (c) 50%

Ans:34)(c)Sol: Let’s suppose original price is 100.
And if it sold at 20% discount then the price would be 80.
But this 80 is 120% of the actual original price. So 66.67 is the actual price of the item.
Now if it is sold for 100 when it actually cost 66.67 then the gross profit would be 33.33 i.e. 49.99% i.e. approx 50%