A furniture dealer purchased a desk for \$150 and then set

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mjtian

A furniture dealer purchased a desk for \$150 and then set

Can someone please explain this answer to me, I am sooooo lost. It seems so easy.....but.... :roll:

A furniture dealer purchased a desk for \$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 dealer's gross profit from the purchase and the sale of the desk?

a) \$40
b) \$60
c) \$80
d) \$90
e) \$100
mjtian

oooppse, forgot to post the answer: e) 100
Guest

S = P + 0.4S
0.6S = 150
S = 150/0.6 = 250
Profit = 40% of 250 = 100
mjtian

Thanks! Algebra was never my strong suit, I wish GMAT tested Calculus instead.
Faith20

Cost Price of Desk = \$150

Mark - up = 40% of S.P.

i.e. cost price = 60% of S.P.

Let x be the Selling price of the desk, then

60% of S.P. = 150

x=\$250

Therefore, profit = \$250 - \$150 = \$100

Ans. (e)
dbernst
ManhattanGMAT Staff

Posts: 300
Joined: Mon May 09, 2005 9:03 am

Good explanations all!
guest128

got the math

great. get it conceptually and mathematically. but can you please help explain the "selling price"? There are two selling prices and how did you know that the selling price indicated by "...if the dealer sold the desk at the selling price" which selling price it is?

i get confused whether it was 0.6S OR 1.4S. Can someone please help? It may be very obvious but I'd really appreciate it. this is something i can apply to other probs. i admit the language can mess me up sometimes.
RonPurewal
Students

Posts: 19747
Joined: Tue Aug 14, 2007 8:23 am

Re: got the math

accidentally deleted my post here -- luckily, the internet is archived forever and ever, so here's what i wrote:

guest128 wrote:
great. get it conceptually and mathematically. but can you please help explain the "selling price"? There are two selling prices and how did you know that the selling price indicated by "...if the dealer sold the desk at the selling price" which selling price it is?

i get confused whether it was 0.6S OR 1.4S. Can someone please help? It may be very obvious but I'd really appreciate it. this is something i can apply to other probs. i admit the language can mess me up sometimes.

there are not two selling prices. there is exactly one price in the problem that is actually CALLED "the selling price", a terminology whose use is absolutely consistent throughout the problem statement.
the gmat is VERY strict about this sort of thing, by the way. they will brook absolutely no ambiguity in problem statements, although you occasionally have to learn and internalize the ways in which they use certain words (such as "either" in this problem).

here's a trick that might help you: if you get confused by a certain wording, simply take that wording out of the problem wherever it appears, and replace it with something else. so, let's transform this statement...
A furniture dealer purchased a desk for \$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 dealer's gross profit from the purchase and the sale of the desk?
into this statement...
A furniture dealer purchased a desk for \$150 and then set the delicious price equal to the purchase price plus a markup that was 40% of the delicious price. If the dealer sold the desk at the delicious price, what was the amount of the dealer's gross profit from the purchase and the sale of the desk?
there, that's probably easier to think about.

--

summa veritas:
BE VERY LITERAL when you read math problem statements. do not, EVER, infer any more information than is actually stated.