Gopal bought a cell phone and sold it to Ram at 10% profit. Then Ram wanted to sell it back to Gopal at 10% loss. What will be Gopal’s position if he agreed?
- A.Neither loss nor gain
- B.Loss 1%
- C.Gain 1%
- D.Gain 0.5%
▶ Answer & Explanation
Correct answer: C. Gain 1%
Let the cost price for Gopal be 100. He sells it to Ram for 110 (10% profit). Ram then sells it back to Gopal at a 10% loss on Ram's purchase price. Ram's purchase price was 110, so 10% loss on this is 11. Thus, Ram sells it back to Gopal for 110 - 11 = 99. Gopal initially paid 100 and now has the phone back, having spent an additional 99. His net expenditure is effectively 99. He originally sold it for 110. Therefore, Gopal made a profit of 110 - 99 = 11 on a transaction series that effectively cost him 99 to 'reset' his initial purchase. The final gain for Gopal is 1% of his initial cost price.
Source: UPSC csat 2017