GMAT Quant Practice | Profit Loss Q13

GMAT Sample Questions | Word Problem

The given question is a GMAT 600 level problem solving question in Profits and Discounts. This GMAT practice question tests the concept of finding the maximum percentage discount that is offered on the marked price.

Question 13: What is the maximum percentage discount that a merchant can offer on her marked price so that she ends up selling at no profit or loss, if she had initially marked her goods up by 50%?

  1. 50%
  2. 20%
  3. 25%
  4. 16.67%
  5. 33.33%

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Explanatory Answer | GMAT Profit Loss Discount Q13

Step 1: Assume cost price and compute marked price

Approach: Assume cost price to be $100.

She had initially marked her goods up by 50%.
Therefore, a 50% mark up would have resulted in her marked price being $100 + 50% of $100 = $100 + $50 = $150.

Step 2 : Compute the % discount offered

She finally sells the product at no profit or loss.
i.e., she sells the product at cost price, which in this case is $100.
Therefore, she offers a discount of $50 on her marked price of $150.

Hence, the % discount offered by her = \\frac{\text{Discount}}{\text{Marked Price}} × 100 = \frac{50}{150} × 100)= 33.33%
Discount offered is 33.33%

Choice E is the correct answer.

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