CAT Understanding the concept of CP, SP, MP, Profit, Loss and discount - Practice Questions & MCQ

Definitions:

1. CP (Cost Price): It is the price at which an article is purchased.

2. SP (Selling Price): It is the price at which an article is sold.

3. MP (Marked Price or List Price): It is the price marked on the article. Discounts are generally calculated on this price.

4. Profit or Gain: When SP > CP, the seller makes a profit.  

   Profit = SP - CP

5. Loss: When CP > SP, the seller incurs a loss.  

   Loss = CP - SP

6. Discount: It's a reduction given on the marked price (MP).  

   Discount = MP - SP

Foundation Building Questions:

Question 1 : 

A shopkeeper purchased a product for Rs. 100 and sold it at a loss of 10%. Find the selling price.

Solution:  

Loss = 10% of 100 = Rs. 10  

Selling Price = CP - Loss = 100 - 10 = Rs. 90

Question 2 :

A product is marked at Rs. 1200. The shopkeeper offers a discount of 20% on it. Find the selling price.

Solution:  

Discount = 20% of 1200 = Rs. 240  

Selling Price = MP - Discount = 1200 - 240 = Rs. 960

Tips and Tricks related to this concept:

1. Profit Percentage: It's calculated on CP.  

   Profit % = (Profit / CP) × 100%

2. Loss Percentage: It's also calculated on CP.  

   Loss % = (Loss / CP) × 100%

3. Discount Percentage: It's calculated on MP.  

   Discount % = (Discount / MP) × 100%

4. If you're given both discount and profit/loss percentages, always find the discount first as it's calculated on MP, and then derive the SP to determine profit or loss.

5. A quick way to determine SP when given a discount or profit/loss percentage:  

   If 10% discount, SP = 0.9  MP  

   If 10% profit, SP = 1.1  CP

Remember, practice is the key when it comes to quantitative aptitude. Go through various questions related to this concept to familiarise yourself with different scenarios and application of formulas.