Each month a retailer sells 100 identical items. On each it

Bunuel I need your help

I tried to understand Bunuel answer why you devided the profile on 9?

what is the wrong in this answer 220 price after dis=209 and how many items we need to sell to make the same profile after pay the cost
209&M-20000=2000
M = 22000/209

Hi 23a2012,

The last part of the question is worded in an "awkward" way, but I assume it's meant to ask "how many discounted items would the retailer need to sell to generate the same total profit as before?"

For this question, we'll need the following formula:

Sell Price = Cost + Profit

We're told that the profit on 1 item is $20 and that this represents 10% of the cost:

Sell Price = Cost + $20
Sell Price = $200 + $20

Thus, the Sell Price is $220 for each item. Selling all 100 items gives the retailer...

100($20) = $2,000 of profit

If the retailer offers a 5% discount on the sell price, then the equation changes...

5%(220) = $11 discount

$209 = $200 + $9

Now, the retailer makes a profit of just $9 per item sold.

To earn $2,000 in profit, the retailer must sell....

$9(X) = $2,000
X = 2,000/9

X = 222.222222 items

You'll notice that this is not among the answer choices.... 221 and 223 are.

Selling 221 items would get us 9(221) = $1989 which is NOT enough money. To get back to AT LEAST $2,000, we need to sell 223 items.

Final Answer:

GMAT assassins aren't born, they're made,
Rich

Hi 23a2012,

It looks like you also posted your responses in a "new" thread. Here is my response to your post from that other thread:
-----------------------

The last part of the question is worded in an "awkward" way, but I assume it's meant to ask "how many discounted items would the retailer need to sell to generate the same total profit as before?"

For this question, we'll need the following formula:

Sell Price = Cost + Profit

We're told that the profit on 1 item is $20 and that this represents 10% of the cost:

Sell Price = Cost + $20
Sell Price = $200 + $20

Thus, the Sell Price is $220 for each item. Selling all 100 items gives the retailer...

100($20) = $2,000 of profit

If the retailer offers a 5% discount on the sell price, then the equation changes...

5%(220) = $11 discount

$209 = $200 + $9

Now, the retailer makes a profit of just $9 per item sold.

To earn $2,000 in profit, the retailer must sell....

$9(X) = $2,000
X = 2,000/9

X = 222.222222 items

You'll notice that this is not among the answer choices.... 221 and 223 are.

Selling 221 items would get us 9(221) = $1989 which is NOT enough money. To get back to AT LEAST $2,000, we need to sell 223 items.

Final Answer:

GMAT assassins aren't born, they're made,
Rich

"Each month a retailer sells 100 identical items. On each item he makes a profit of $20 that constitutes 10% of the item's price to the retailer."

Profit of $20 is 10% of cost price to retailer. So cost price of retailer is $200. He sells it for $220. Overall profit he makes is $20*100 = $2000

"If the retailer contemplates giving a 5% discount on the items he sells"

If he gives 5% off on $220, he will sell the items for 220*(95/100) = $209

He makes only $9 per item so to make $2000, he needs to sell 2000/9 = 222.22 = 223 items

Answer (D)

Thank you for your answer I see my mistake I should do as follow
209*m-200*m=2000
9m=2000
m=2000/9 =222.22 : :

Thank you for your answer I see my mistake I should do as follow
209*m-200*m=2000
9m=2000
m=2000/9 =222.22

Bunuel and others:
Request your help in understanding the meaning of "what is the least number of items he will have to sell each month to justify the policy of the discount?".
My interpretation is (220*95%)*x= 220*100. Basically we are trying to sell more items to break even after discounting the price of product.

Hi JarvisR,

In my prior post in this thread, I noted the 'awkward' wording of the prompt, but the 'intent' of the prompt is to ask how many discounted items would need to be sold to generate the SAME profit. If you were to take your calculation through to the end, what answer would you choose?

GMAT assassins aren't born, they're made,
Rich

Since he sells 100 items and each item has a profit of $20, he makes a total profit of 100 x 20 = 2000 dollars a month. Furthermore, Since $20 constitutes 10% of the item’s price to the retailer, the cost of each item when the retailer purchases it is 20/0.1 = 200 dollars and thus the price of each item when he sells it = 200 + 20 = 220 dollars.

Now he plans to discount the selling price by 5%; thus, each item would be sold for 220 x 0.95 = 209 dollars.

We can let n = the total number of items he has to sell now to still make the $2000 monthly profit.

R - C = P

209n - 200n = 2000

9n = 2000

n = 222.22

Since n has to be an integer, he has to sell at least 223 items. (Note: Selling 222 items will be just short of making the $2000 profit, but selling 223 items will do.)

Answer: D

Hi friends,

I have approached the above problem the following way.

I have equated the revenues i.e. 220*100 = 209*n
n = (220*100)/209.

Can someone please tell mw what's wrong with my approach?

Thanks,
Sowmya

I dont think this is a good quality question. I got this question in a gmat club test and also got it right but while I was attempting it, I knew this was a substandard question intending to check everything but quant skills. I mean why would two options such close as 221 and 223 be given when the answer is in decimals just between these two values

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