Q22 (CISF/2022) Economy › Basic Concepts & National Income

In order to convert a loss of 5% to a profit of 5%, a shopkeeper raises the price of an item by ₹ 500. What is the cost price of the item ?

Result

Your answer: — · Correct: B

Explanation

Let the Cost Price (CP) of the item be x.

A loss of 5% means the initial Selling Price (SP₁) was 95% of CP (0.95x). To achieve a profit of 5%, the new Selling Price (SP₂) must be 105% of CP (1.05x).

The problem states that the price was raised by ₹ 500 to bridge this gap. Therefore:
SP₂ - SP₁ = 500
1.05x - 0.95x = 500
0.10x = 500

Solving for x:
x = 500 / 0.10 = 5,000

Alternatively, the total percentage change required is 5% (to offset the loss) + 5% (to gain profit) = 10%. Since 10% of the Cost Price is ₹ 500, 100% of the Cost Price is ₹ 5,000. Thus, the cost price is ₹ 5,000.

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In order to convert a loss of 5% to a profit of 5%, a shopkeeper raises the price of an item by ₹ 500. What is the cost price of the item ?

Explanation

SIMILAR QUESTIONS

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