The given question is a GMAT 650 level problem solving question from the topic Profit, Loss & Discounts. This GMAT quant question tests the concept of computing percentage profit when sold at a discount to the marked price.

Question 12: By selling an article at 80% of its marked price, a merchant makes a loss of 12%. What % profit will the merchant make if the article is sold at 95% of its marked price?

- 5% profit
- 1% loss
- 10% profit
- 5.5% profit
- 4.5% profit

From INR

Let the marked price be S and the cost price of the article be $100.

When the article is sold at 80% of its marked price, selling price is 0.8S.

Selling the article at 0.8S results in a loss of 12% of the cost price.

Therefore, the loss incurred when selling at 0.8S = 12% of 100 = $12.

Hence, when selling at 80% of the marked price, the article is sold at 100 − 12 = $88.

i.e., 0.8S = $88.

or S = \\frac{88}{0.8}) = **$110**.

If the merchant sells at 95% of the marked price, then the new selling price of the article is 95% of $110 = $104.5

The profit made = 95% of Selling Price − Cost Price = 104.5 − 100 = $4.5.

% Profit = \\frac{\text{profit}}{\text{cost price}} = \frac{4.5}{100}) = 4.5%

**The merchant made 4.5% profit**

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