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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 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 = \($128 - $120 = $8\).

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

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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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.

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.

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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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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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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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)

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%

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%