Arithmetic-6 (Profit & Loss)(SNAP2008)

A merchant wants to make profit by selling food grains. Which of the following would maximize his profit?

I.  Sell product at 30% profit

II. Increase the price by 15% over the cost price and reduce weight by 15%

III. Use 700gm of weight instead of 1 kg

IV. Mix 30% impurities in grains and sell it at cost price

(A) III

(B)  II and I

(C)  II

(D) All give same profit

Solution follows here:

Solution:

Assume cost price to be Rs 100 and weight to be 100gm

Option I :

Profit is given as 30%        => Profit ratio= 30/100

Option II :

Increase price by 15% implies new cost price = 115

Reduce weight by 15% implies new weight = 85

So he sells Rs 85 worth of item for Rs 115

Profit ratio= profit/cost = (115-85)/85 = 30/85

Option III :

Using 700gm weight instead of 1kg

So he sells 700 worth of item for 1000

Profit ratio= profit/cost = (1000-700)/700 = 300/700 = 30/70

Option IV :  Mix 30% impurities

If 30% impurities are mixed to a weight of 100, net weight becomes 130. At the presumed rate, he sells this at 130, which means he is selling actual weight of 100gm for Rs 130.

Profit ratio= profit/cost = (130-100)/100 = 30/100

Now compare profit ratios of all the four options respectively:

30/100          30/85                        30/70                        30/100

Numerators are same hence value with lowest denominator is greatest.

Hence option III yields highest profit. Answer (A)