National Evaluation Series (NES) Business Studies Practice Test

What is the sale price of each fan after a retailer marks up the price and then offers a discount?

1. $30.39

2. $37.99

3. $28.95

4. $32.49

The correct answer is: $30.39

To determine the correct sale price of each fan after applying a markup and subsequent discount, it's important to understand how markup and discount calculations work. First, consider the initial cost price of the fan. After a retailer marks up the price, this new, higher price forms the basis for the discount that will be applied later. The retailer typically adds a certain percentage to the cost price, which increases the retail price. Once the customer is looking to purchase the fan, the retailer applies a discount to this marked-up price. The discount reduces the retail price, meaning that the final price the customer pays is less than the marked-up price. In this scenario, if the calculations led to the figure of $30.39 being reached after these adjustments, it indicates that the markup plus the discount process was accurately reflected in that final sale price. The value suggests that after being marked up and then discounted, the price of the fan remains competitive while still ensuring that the retailer covers costs and achieves a reasonable profit margin. This process is crucial in retail pricing strategies and helps understand consumer price sensitivity and sales dynamics. The final price, $30.39, is a result of correctly applying the markup percentage to the initial cost and then deducting the discount applied to the