Final answer:
To achieve a keystone markup with the fixed discounts of 25% and 20% already accounting for a 40% combined discount, no additional discount is necessary. Therefore, the minimum trade discount needed to request is 0%.
Step-by-step explanation:
To keystone the markup, the total trade discount must effectively double the cost of the item, because keystone markup implies a 100% markup over cost. If the vendor gives you fixed discounts of 25% and 20%, the compounded discount is calculated by first reducing the price by 25% and then reducing the remaining amount by 20%. This results in a total discount of 40% (since you multiply 0.75 by 0.80 to achieve a 0.60 final price, or 40% off).
Since you already have a 40% total discount, you technically wouldn't need to request additional discount to achieve keystone markup; any additional discount would create a markup beyond keystone. Therefore, the minimum trade discount you should request is 0%. However, since this is not an option, the answer that the vendor tells you that 8% is negotiable but since we are already at a 40% discount, no further discount is necessary to achieve keystone markup.
Even though the provided SEO keywords appear irrelevant and might have been placed in error, we can conclude that no additional discount is needed to keystone the markup.