Answer:
30 shirts
Explanation:
Let x be the number of shirts a mercant bought initially.
He bought them for $120, so each shirt costed

The next day the price charged for each shirt was reduced by $1, so the new price of the shirt became

The merchant calculated that, at the sale price, he could have bought 10 more shirts, so he could buy x + 10 shirts.
Number of shirts = x + 10
Price of each shirt

Total cost = $120
Hence,

The number of shirts cannot be negative, so x = 30.