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- A merchant changed his trade discount from 25% to 15%. This would increase selling price by

# A merchant changed his trade discount from 25% to 15%. This would increase selling price by

Learn about the effects of reducing a trade discount from 25% to 15% on the final selling prices.

by Maivizhi A

**Updated **Mar 05, 2024

## A merchant changed his trade discount from 25% to 15%. This would increase selling price by

A. 3(1/3)%

B. 6(1/6)%

C. 13(1/3)%

D. 16(1/3)%

**Answer : **

**The percentage increase in selling price is approximately 13(1/3)%.**

Let's assume the cost price of the item is $100.

Initially, with a 25% trade discount, the selling price would be 75% of the cost price: Selling price 1 = (75/100) * 100 = $75

Now, with a 15% trade discount, the selling price would be 85% of the cost price: Selling price 2 = (85/100) * 100 = $85

Now, let's find the difference in selling prices: Increase in selling price = Selling price 2 - Selling price 1 = $85 - $75 = $10

To find the percentage increase, we use the formula: Percentage increase = (Increase / Original selling price) * 100

Percentage increase = (10 / 75) * 100 = 40/3

So, the percentage increase in selling price is approximately 13(1/3)%. Therefore, the correct answer is option C.

## What is Profit Percentage?

Profit percentage is a financial metric used to measure the profitability of a business or investment relative to the revenue generated. It is typically expressed as a percentage and represents the portion of revenue that constitutes profit after all expenses and costs have been deducted.

The formula to calculate profit percentage is:

Profit Percentage = (Profit / Revenue)×100

Where:

- Profit is the amount of money earned after subtracting all expenses (including taxes, operating costs, and other overheads) from the revenue.
- Revenue is the total income generated from sales or other business activities.

Profit percentage provides insight into how efficiently a business is being managed and how effectively it is generating profit from its operations. It is a critical measure for assessing the financial health and performance of a company and is often used by investors, analysts, and management for decision-making purposes.

## A merchant changed his trade discount from 25% to 15%. This would increase selling price by - FAQs

1. What is a trade discount?

A trade discount is a reduction in the list price of a product or service offered by a seller to a buyer, typically based on factors such as quantity purchased, customer loyalty, or trade agreements.

2. Why did the merchant change the trade discount from 25% to 15%?

The merchant likely adjusted the trade discount to attract more customers, increase sales, or respond to market conditions and competition.

3. How does changing the trade discount affect the selling price?

Decreasing the trade discount from 25% to 15% increases the selling price of the item.

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