Multiple choice

On a certain item, profit is 120%. The cost price increases by 10%, what will be the new profit margin (in %) if selling price remains the same?

  1. 50

  2. 60

  3. 100

  4. 90
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let CP = 100, then SP = 220 (120% profit). If CP increases by 10%, new CP = 110. The SP remains 220, so the new profit is 220 - 110 = 110. The profit percentage is (110/110) * 100 = 100%.

AI explanation

Let the initial cost price be 100, so the selling price at a 120% profit is 220. The new cost price increases by 10% to become 110. With the selling price remaining at 220, the new profit is 110. The new profit margin is 110 divided by 110, multiplied by 100, giving 100%.

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