Question

$A$ bought a tape recorder for Rs $8,000$ and sold it to $B$. $B$ in turn sold it to $C$, each earning a profit of $20\%$. Which of the following is true:

• A. $A$ and $B$ earn the same profit
• B. $A$ earns more profit than $B$
• C. $A$ earns less profit than $B$
• D. Cannot be decided

Answer 1

The correct option is C

$A$ earns less profit than $B$

Cost price: The amount paid for a product.

Selling Price: The amount at which the product is sold

Marked Price: The price mentioned by the shopkeeper is more than the selling price, to give a discount to the buyer.

• The cost price of tape recorder bought by $A=Rs.8000$
• The cost price of tape recorder for $B=20\%$ profit on cost price for $A$:

$=20/100x8000+8000$

$=20x80+8000$

$=1600+8000$

$=Rs.9600$

Cost price of tape recorder sold to $C=20\%$ profit on cost price for $B$:

$=20/100x9600+9600$

$$\begin{gathered} =1929+9600 \\ =Rs.11520 \end{gathered}$$

Here,

• Profit for $A=Rs.1600$
• Profit for $B=Rs.1920$

So, $A$ earns less profit than $B$.