RikaMueller wrote:A furniture dealer purchased a desk at $ 150 and then set the selling price equal to the purchase price plus a markup that was 40% of the selling price. If the dealer sold the desk at the selling price, what was the amount of the dealers gross profit from the purchase and the sale of the desk
40
60
80
90
100
pls clarify. My choice was incorrect.
Rika, if you got this question wrong, you should consider another approach that is less likely to lead you astray: plug in the answers, which represent the profit.
Let P=profit, S=selling price, M=mark up.
With each answer, we need to see whether S = 150 + M (because the selling price needs to equal the purchase price + the markup.)
Answer choice C:
P = 80
S= 80+150 = 230
M = .4(230) = 92.
Does 230 = 150 + 92? No.
We need more profit. Eliminate A, B an C.
Answer choice D:
P = 90
S= 90+150 = 240
M = .4(240) = 96.
Does 240 = 150 + 96? No.
We need more profit.
The correct answer is E.
No need to check E -- on the actual GMAT, we should move onto the next question -- but for the skeptical among us, answer choice E:
P = 100
S= 100+150 = 250
M = .4(250) = 100
Does 250 = 150 + 100? Success!
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