A distributor sells a product through an online store, which take a commission of 20% of the price ...
A distributor sells a product through an online store, which take a commission of 20% of the price set by the distributor. The distributor obtains the product from a producer at the price of $20 per item. What is the price that the buyer observers online if the distributor wants to maintain a 20% profit on the cost of the item?
Answer/Solution
$30
Steps/Work
Let x be the price that buyers see online.
The distributor wants to receive 1.2(original price) which should be 80% of x.
1.2(20) = 0.8x
x = 1.2(20) / 0.8 = 1.5(20) = $30
The answer is A.
The distributor wants to receive 1.2(original price) which should be 80% of x.
1.2(20) = 0.8x
x = 1.2(20) / 0.8 = 1.5(20) = $30
The answer is A.