Answer: Let's assume the cost price (CP) of the watch (without any discount) is 'x' rupees.
With a 20% discount:
After a 20% discount, the selling price (SP) of the watch is 80% of the cost price (as he loses Rs. 400). We can represent this as:
SP = x - 0.2x = 0.8x
Now, it is given that the shopkeeper gains Rs. 200 without any discount. So, the selling price without any discount is the cost price plus Rs. 200:
SP = x + 200
Equating the two selling prices:
Since both the expressions represent the selling price (with discount and without discount), we can set them equal to each other:
0.8x = x + 200
Solving for 'x':
Subtract 'x' from both sides:
0.8x - x = 200
0.2x = 200
Now, divide both sides by 0.2 to find the value of 'x':
x = 200 / 0.2
x = 1000
So, the cost price (market price) of the watch is Rs. 1000.