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You are here: Home » GMAT Test Prep Problem » Profit, Loss & Discounts » Question 4

The GMAT Sample Math problem is from the topic Profit and Loss and is on finding out the maximum percent discount that may be offered on the marked price.

What is the maximum percentage discount that a merchant can offer on her Marked Price so that she ends up selling at no profit or loss, if she had initially marked her goods up by 50%?

1. 50%
2. 20%
3. 25%
4. 16.67%
5. 33.33%
   
   

The correct choice is (E) and the correct answer is 33.33%.

The merchant had initially marked her goods up by 50%.

Let us assume that her cost price of the goods to be $ 100.

Therefore, a 50% mark up would have resulted in her marked price being $100 + 50% of $100 = $100 + $50 = $150.

The question states that she finally sells the product at no profit or loss. This essentially, means that she sells the product at cost price, which in this case would be $100.

Therefore, she had offered a discount of $50 on her marked price of $150.

Hence, the % discount offered by her = = 33.33%.