Marked price is 10% above cost price. Offering a 10% discount on it, the vendor experiences what outcome
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Answer: C. loses 1%
Explanation
Marking an item up by ten percent increases its price above the base cost price. Offering a subsequent ten percent discount reduces the marked price by that percentage. Successive equal percentage markups and discounts always result in a net loss equal to the square over one hundred. Price markups increase the cost price to establish a higher retail selling price for merchants. Percentage discounts reduce the retail price during promotional sales events. Applying an equal percentage increase followed by a decrease results in a net fractional loss.
Retailers must understand net pricing effects to avoid unintended losses during promotional clearance sales. Consumer protection agencies monitor advertising claims involving simultaneous markups and discounts. Understanding successive percentage changes is crucial for effective retail pricing management. Option A suggests no loss and no gain which ignores the mathematical reality of successive percentages. Option B suggests a net gain which contradicts standard successive percentage decrease formulas. Option D is incorrect because option C accurately identifies the one percent net loss outcome.
- Subject
- Mathematics
- Category
- Mathematics
- Topic
- —
- Difficulty
- medium
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