Multiple choice

A grain merchant does not think much of ethical practice. His only aim is to earn as much profit as possible. Which of the following would best serve his purpose? I. Fixing selling price one-eighth above the cost price II. Mixing stones (available for free) 12.5% by weight of original mixture and fixing selling price at cost price III. Using an 8.75 kg weight for 10 kg weight and selling at cost price IV. Selling only 15/16th of the weight kept on balance by cheating and fixing the selling price 6.25% above the cost price

  1. I

  2. I and II

  3. IV

  4. III

  5. I and III
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

I: Profit = 1/8 = 12.5%. II: Cost = 100, Weight = 112.5, Selling Price = 100. Profit = (112.5-100)/100 = 12.5%. III: Selling 8.75kg for the price of 10kg. Profit = (10-8.75)/8.75 = 1.25/8.75 = 1/7 = 14.28%. IV: Selling 15/16 weight at 106.25% price. Profit = (1.0625 / (15/16)) - 1 = (1.0625 * 16 / 15) - 1 = 1.133 - 1 = 13.3%. III yields the highest profit.

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