Question

CB clothing ordered sweaters at a wholesale cost of $20 each. The store marked up the price by 50% above the wholesale cost to use as their selling price. After every month that the sweater didn't sell, the store reduced the selling price by 20% . After how many monthly price reductions did the price dip below the wholesale cost?

Answer 1

after 2 monthly price reductions

Answer 2

2 months

Explanation:

Consider, we told that the store marked up the price by 50% above the wholesale cost to use as their selling price, meaning, CB clothing's initial selling price is $30.

Thus, if after every month that the sweater didn't sell, the store reduced the selling price by 20% of the initial selling price of $30, which means there will be a $6 deduction from the initial price (20% * $30).

So, for

• the first month; $30-$6 = $24
• the second month; we subtract another 20% from $24 which is $24-$4.8 = $19.2 (a price that has now dipped below the wholesale cost).