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Question 6 : If a seller gives a discount of 15% on retail price, she still makes a profit of 2%. Which of the following ensures that she makes a profit of 20% ?

1. Give a discount of 5% on retail price
2. Give a discount of 2% on retail price
3. Increase the retail price by 2%
4. Sell at retail price

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Video Explanation

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Explanatory Answer

Method of solving this CAT Question from Profit and Loss

Given that if a seller gives a discount of 15% on retail price, she still makes a profit of 2%.
Let us assume marked price to be x. So, selling price to be 0.85x on giving 15% discount on retail price she still makes a profit of 2%.

We have to find which of the following options ensures that she makes a profit of 20% so the discount should be much lower.

⟹ \\frac{0.85}{1.02}) × 1.20 = 1
Hence by selling at retail price she makes a profit of 20%.

The question is "If a seller gives a discount of 15% on retail price, she still makes a profit of 2%. Which of the following ensures that she makes a profit of 20% ?"

Hence, the answer is Sell at retail price

Choice D is the correct answer.