Question

Suppose that you are the owner of a local sandwich shop. Your supplier of bread has increased its wholesale price by 10 percent, your supplier of condiments has raised prices by 10 percent, and your supplier of meats and vegetables has raised prices by 10 percent. Suppose these are your only supplies. Therefore, you decide to raise your sandwich prices accordingly.

If you wish to maintain the same level of profit given the increases in your supply prices, you should increase your sandwich prices by what percentage?

a. 5 percent
b. 30 percent
c. 100 percent
d. 20 percent
e. 10 percent

In general, you _________ add percentages as you would add cadinal numbers.

Answer 1

Option E is correct

The price of the sandwich to maintain the same level of profit should be increased by 10%.

Step-by-step explanation:

Let us assume the prices of condiments, meats and vegetables are all $100 each before the increment. After the the increment, each of them will cost:

100×(1+10%)= $110

The total cost of supplies before the inflation= 100×3= $300

The total of supplies after the increment = 110×3= $330

The rate of inflation = (330/300-1) × 100 =10%

The price of the sandwich to maintain the same level of profit should be increased by 10%