Correct Answer - Option 1 : 10%
Given:
Mark up in cost price = 20%
Selling price, SP = (100 – 25)% × Market price
Concept used:
Market price × (100 – discount)% = Selling price
Calculation:
Let the market price be MP.
SP = 75% × MP
MP = 120/100 × CP
⇒ CP × 12/10 × 3/4 = SP
⇒ CP × 9/10 = SP
⇒ SP/CP = 9/10
(CP – SP)/CP = (10 – 9)/10
CP – SP = loss, L
⇒ L/CP = 1/10
L/CP × 100 = 1/10 × 100
⇒ Loss percentage, L% = 10%
∴ The sale of the article results in a loss of 10%.