Question : A shopkeeper increases the cost price of an item by 50% and offers a discount of 40% on this marked price. What is his loss percentage?
Option 1: 15%
Option 2: 20%
Option 3: 10%
Option 4: 5%
Correct Answer: 10%
Solution :
Let the cost price of the item be 100.
The shopkeeper increases the cost price by 50% so,
Marked Price = 100 + 0.5 × 100 = 150
The shopkeeper offers a discount of 40% on the marked price
⇒ Discounted Price = 150 − 0.4 × 150 = 90
Loss = Cost Price − Discounted Price = 100 – 90 = 10
Now,
Loss Percentage = $\frac{\text{Loss}}{\text{Cost Price}} × 100=\frac{10}{100} × 100 = 10\%$
Hence, the correct answer is 10%.
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