A dealer offers a cash discount of 20% and still makes a profit of 20%

A dealer offers a cash discount of 20% and still makes a profit of 20%, when he further allows 16 articles to a dozen to a particularly sticky bargainer. How much percent above the cost price were his wares listed?

  1. 75%
  2. 66 2/3%
  3. 100%
  4. 80%

Solution

Let the cost price (CP) be x.

As dealer makes a profit of 20%, selling price (SP) = 1.2x

But the dealer incurs loss by selling 16 articles at the cost of 12 articles.

So, SP of 16 articles = CP of 12 articles

Loss = 25%

Now, SP = 1.6x

80% of marked (or list) price (MP) = 1.6x

MP = 2x

Hence, list price is 100% above cost price.

The correct option is C.