Problem: A producer produces a product and sells it to the wholesaler at 25% profit over the production cost. The wholesaler makes a 20% profit on his purchase price and sells it to the retailer. The retailer sells it to the final consumer at Tk. 900 making a profit of 20% over his purchase price. What was the production cost of the product? What was the overall increase (in percent) in price paid by the final consumer from the production cost?

Correct Answer: 80 %

Explanation:

Let, the production cost ‘I‘k. xProducer selling price = x + x x 25%

= 1.251: = Whole seller’s costWhole seller’s selling price = 1.251: + 1.25x x 20%

= 1.5:: = Retailer’s cost

Retailer’s selling price = 1.5x + 1.5x x 20% = 1.80::According to the question,1.80x = 900x = $\frac{900×100}{180}$ = 500Production cost = Tk. 500% increase = $\frac{900-500}{500}$ x100% = 80%