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M07-33

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A shop purchased a pair of sunglasses for $120 and was selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price. After some time a shop owner decided to decrease the selling price by 20 percent. What was the shop's gross profit on this sale?

A. $0
B. $2
C. $4
D. $6
E. $8
[Reveal] Spoiler: OA

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A shop purchased a pair of sunglasses for $120 and was selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price. After some time a shop owner decided to decrease the selling price by 20 percent. What was the shop's gross profit on this sale?

A. $0
B. $2
C. $4
D. $6
E. $8


Let the markup be \($x\), so \(x\) must be 25% of the selling price, which would be \(120+x\): \(x=0.25(120+x)\). Solving gives \(x=40\). Hence the selling price was \(120+40=160\).

The price after the discount of 20% would be \(160*0.8=128\) and the gross profit on the sale would be: final selling price - cost of the sunglasses = \($128 - $120 = $8\).


Answer: E
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Re: M07-33 [#permalink]

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New post 22 Nov 2014, 12:03
hi bunnel,
can you pls explain how the price after discount has come . Especially how 0.8 has come ?
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prashd wrote:
hi bunnel,
can you pls explain how the price after discount has come . Especially how 0.8 has come ?


20% discount from selling price = price - price*0.2 = price(1 - 0.2) = 0.8*price.

Hope it's clear.

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Re M07-33 [#permalink]

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I think this question is poor and helpful.
*selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price.*
This means if CP is 120 then SP = 120+0.25*CP

and by this approach we get ans. 0

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New post 06 Jan 2015, 02:43
sanket1991 wrote:
I think this question is poor and helpful.
*selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price.*
This means if CP is 120 then SP = 120+0.25*CP

and by this approach we get ans. 0


Please read the question and the solution carefully. It should be 120 + 0.25*SP = SP --> SP = 160.
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Re: M07-33 [#permalink]

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sanket1991 wrote:
I think this question is poor and helpful.
*selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price.*
This means if CP is 120 then SP = 120+0.25*CP

and by this approach we get ans. 0


Actually, I feel that this question is representative of many of the trickier questions you'd find on the real GMAT ~ one that you need to pay attention to its finer details.

Questions are not posed in the most convenient ways for the test taker --- and when one is stressed and trying to "race" against the clock, it's real easy to miss out on the finer details of a question that "looks" easy.

Cost: 120
Selling Price: SP = 120 + (1/4)SP ---> NOT (1/4 Cost)... SP - (1/4) SP = 120 ... (3/4) SP = 120 ... SP = 160
New Selling Price: NSP = 160 (4/5) ... NSP = 128

Profit = NSP - Cost ----> 128 - 120 = 8

Good question.

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Re: M07-33 [#permalink]

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New post 17 Aug 2015, 19:14
Why we calculate discount by multiplying by 0.8 but not dividing by 1.2.
I believe we should have 160/1.2=133.3. Please explain when we divide and when multiply.

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Re: M07-33 [#permalink]

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Bunuel wrote:
A shop purchased a pair of sunglasses for $120 and was selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price. After some time a shop owner decided to decrease the selling price by 20 percent. What was the shop's gross profit on this sale?

A. $0
B. $2
C. $4
D. $6
E. $8


cost price of glasses is 120$.
Let the selling price be x.
Selling price=\(120+(\frac{25}{100}*Selling price)\)
Selling price=160
this Selling price is decreased by 20%, so Selling price=\(160(1-(\frac{20}{100}))\)=128
Profit=Selling price-Cost price
=128-120
=8
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Re: M07-33 [#permalink]

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New post 02 Dec 2015, 16:05
Bunuel wrote:
A shop purchased a pair of sunglasses for $120 and was selling it at a price that equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price. After some time a shop owner decided to decrease the selling price by 20 percent. What was the shop's gross profit on this sale?

A. $0
B. $2
C. $4
D. $6
E. $8



To certain extent - it is confusing. Because "new selling price" should have been mentioned.

I tried to solve by SP = 120 + .25 SP ; .75 SP = 120; Then, with the flow of the question I solved further by setting new SP in this equation itself - .75 * .80SP = 120; which produced incorrect result SP = 200
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Re: M07-33 [#permalink]

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New post 19 Jan 2016, 06:44
excellent wordplay in the question will get many confused but, it is lucid.
cost price = 120
selling price (SP) = 120 + 0.25*SP --- (this equation is the catch)
Hence 0.75*SP = 120 and hence SP = 160
Final SP = 0.8*SP = 0.8*160 = 128.
Hence a profit of 8$.
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Re: M07-33 [#permalink]

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New post 17 Feb 2016, 13:58
Tricky wording. I should've known answer A was too easy!

"equaled the purchase price of the sunglasses plus a markup that was 25 percent of the selling price." Is two equations.
SellingPrice = 120 + Markup
Markup= 1/4(SellingPrice)

SellingPrice = 120+ (SellingPrice/4) = 3/4SellingPrice = 120 = SellingPrice = $160

160*(4/5) = 128

Profit = Selling - Cost

E. $8

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Re: M07-33 [#permalink]

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New post 06 Sep 2016, 12:51
I would say nice question... caught me off guard with the wording...

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New post 25 Jul 2017, 19:06
I think this is a high-quality question and I agree with explanation.

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New post 05 Nov 2017, 16:45
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate. 120 * 1.25 =150
25% of 120= 30; 120+30= 150
Not sure how you reached 40%

150*.8=120. The answer would be 0

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Re: M07-33 [#permalink]

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New post 05 Nov 2017, 21:13
Rigatoni wrote:
I think this is a poor-quality question and the explanation isn't clear enough, please elaborate. 120 * 1.25 =150
25% of 120= 30; 120+30= 150
Not sure how you reached 40%

150*.8=120. The answer would be 0


Please re-read the discussion above or check another thread here: https://gmatclub.com/forum/a-shop-purch ... 39958.html

Hope it helps.
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Re: M07-33   [#permalink] 05 Nov 2017, 21:13
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