Question: When a retailer marks down a scarf by 25%, it still makes a 50% profit over the price at which it originally purchased the scarf. By what percent would the retailer have to mark down the scarf to make neither profit nor loss from the sale?

1. 25%
2. 50%
3. 60%
4. 75%
5. 95%

Answer:
Solution with Explanation:
Approach Solution (1):

Assume the present price of scarf to be 100
Mark down price = 25% of 100 = 100 – 25 = 75
75 rupees is still a profit of 50%, therefore original price = 50
The price which the retailer needs to mark down fro no profit no loss is 100 – 50 = 50, which is 50%

Correct Option: B

Approach Solution (2):

If the scarf is marked down by 25%
A scarf costing 200$ would be available for ¾ * 200$ = $150
Since we are still making 50% profit, the cost price of the scarf is $150/1.5 = $100
Therefore, the scarf would be sold for $100 less which is 100/200 or 50% at it’s original price

Correct Option: B

Approach Solution (3):

R = 100
M1 = 75; P1 = 50
C = 75/150 * 100 = 50
Thus, to make no profit/no loss the price will have to be reduced from 100 to 50

Correct Option: B

“When a retailer marks down a scarf by 25%, it still makes a 50% profit over the price at which it originally purchased the scarf. By what percent would the retailer have to mark down the scarf to make neither profit nor loss from the sale?”- is a topic of the GMAT Quantitative reasoning section of GMAT. This question has been taken from the book “GMAT Official Guide Quantitative Review”. To solve GMAT Problem Solving questions a student must have knowledge about a good amount of qualitative skills. The GMAT Quant topic in the problem-solving part requires calculative mathematical problems that should be solved with proper mathematical knowledge.

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