Question

A shopkeeper marks his books at 25% above the cost price. Due to slump in the market, his cost reduces by 5%. And then,to boost his sale, he offered a discount of 8% due to which sales goes up by 25%. Compute the change in the shopkeepers profit.

Accepted Answer

A. Let initial CP per book = Rs. 100, and initial number of books sold = $x$. Initial MP = Rs. 125, SP = Rs. 125. Initial total profit = $(125 - 100)x = 25x$. New CP per book = Rs. 95. Discount = 8% on MP = $0.08 	imes 125 = 10 \Rightarrow$ New SP = Rs. 115. New profit per book = $115 - 95 = 20$. New sales volume = $1.25x$. New total profit = $20 	imes 1.25x = 25x$. Since initial and new total profit are both $25x$, there is no change in profit.

Profit percentage change calculation

Explanation

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