A supplier sells 20 pencils at the marked price of 16 pens to a retailer. The retailer, in turn, sells them at the marked price. What is the percentage profit or percentage loss of the retailer?a)Loss 25%b)Profit 25%c)Loss 20%d)Profit 20%Correct answer is option 'B'. Can you explain this answer?

Question

Answer

Given information:
- A supplier sells 20 pencils at the marked price of 16 pens to a retailer.
- The retailer sells them at the marked price.

To find: Percentage profit or percentage loss of the retailer.

Solution:
Let's assume the marked price of a pencil is 'x' and the marked price of a pen is '1'.

Then, the supplier sells 20 pencils at the marked price of 16 pens, which means:
20x = 16
x = 16/20
x = 0.8

So, the marked price of a pencil is 0.8 pens.

Now, the retailer sells these 20 pencils at the marked price, which means he sells them at 20x = 20(0.8) = 16 pens.

The cost price of the retailer is the price at which he bought the pencils from the supplier, which is 20 pens (since he bought 20 pencils at the price of 16 pens).

To calculate the profit or loss percentage, we need to find the difference between the selling price and the cost price, and then express it as a percentage of the cost price.

- Selling price = 16 pens
- Cost price = 20 pens

Profit/Loss = Selling price - Cost price
Profit/Loss = 16 - 20
Profit/Loss = -4

Since the retailer is selling at a lower price than the cost price, he has incurred a loss.

Loss percentage = (Loss/Cost price) x 100
Loss percentage = (-4/20) x 100
Loss percentage = -20%

Hence, the percentage loss of the retailer is 20%. Therefore, option (c) is incorrect, and option (b) is the correct answer.

Answer

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