Question

Two merchants sell, each an article for Rs. $1000$. If merchant $A$ computes his profit on cost price, while merchant $B$ computes his profit on selling price, they end up making profits of $25\%$. By how much is the profit made by Merchant $B$ greater than that of Merchant $A$?

• A. $66.67$
• B. $125$
• C. $50$
• D. $100$

Answer 1

The correct option is C $50$

Merchant $B$ computes his profit as a percentage of selling price. He makes a profit of $25\%$ on selling price of Rs. $1000$ i.e. his profit $=25\%$ of $1000=$ Rs. $250$.
Merchant $A$ computes his profit as a percentage of cost price.
Therefore, when he makes a profit of $25\%$ or ${\left(\frac{1}{4}\right)}^{th}$ of his cost price, then his profit expressed as a percentage of selling price $=$ or $20\%$ of selling price.
So, merchant $A$ makes a profit of $20\%$ of Rs. $1000=$ Rs. $200$.
Merchant B makes a profit of Rs. $250$ and merchant A makes a profit of Rs. $200$.
Hence, merchant $B$ makes Rs. $50$ more profit than merchant $A$.