rohan2345 wrote:
A retailer shop's gross profit on a camera was 10 percent of the cost of the camera. If the store increase the selling price of the camera from $440 to $460 and the cost of the camera remained the same, then the shop's gross profit on the camera after the price increase was what percent of the cost of the camera?
(A) 11%
(B) 12.5%
(C) 13%
(D) 15%
(E) 16.67%
Because we have only two prices and cost does not change, we must assume that the first price of $440 is the one in which profit = 10% of cost ($440 yields cost)
Profit = TR - TC
Profit also = 0.10 C. Put this term on LHS
So
\(.10C = TR - TC\)
\(1.10C = TR\) for the initial sell price before the increase
1) First sell price (TR) yields the cost
Sell price = TR = $440
From above:
\(TR = 1.10C\)
\($440 = 1.1 C\)
\(C = $400\)Cost does not change.
2) New sell price (the increase) = $460
TR - TC = Profit
Profit:
\(($460 - $400) = $60\)3) Profit ($60) from new sell price is what percent of cost ($400)?
\(\frac{$60}{$400}*100= (.15*100) = 15\) %
Answer D
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