A retailer marks up the cost price of goods by 150% and then offers a discount of 40% on the marked price.\nIf the cost price of an article is Rs 800, what will be the final selling price (in rupees) after applying both the markup and the discount?

Introduction / Context:
This question examines the combined effect of a large markup followed by a substantial discount. Retailers often increase the marked price well above the cost price and then advertise a discount to make the deal look attractive while still earning profit. Understanding the net effect of such successive percentage changes is important in profit and loss calculations and in interpreting real world pricing strategies in shops and online marketplaces.

Given Data / Assumptions:

• Cost price (CP) of the article = Rs 800.
• Markup rate on cost price = 150%.
• Discount rate on marked price = 40%.
• We need to determine the final selling price after both operations.
• There are no additional taxes or hidden charges.

Concept / Approach:
The marked price is obtained by increasing the cost price by the markup percentage. A markup of 150% means that the marked price is the cost price plus 150% of the cost, or 2.5 times the cost price. The selling price is then found by applying the discount percentage to this marked price. Specifically, a 40% discount leaves 60% of the marked price. This can be modelled with multiplicative factors, first 2.5 for the markup and then 0.6 for the discount.

Step-by-Step Solution:
Step 1: Cost price (CP) = Rs 800. Step 2: Markup rate = 150% on cost, so markup factor = 1 + 150 / 100 = 2.5. Step 3: Marked price (MP) = CP * 2.5 = 800 * 2.5 = Rs 2000. Step 4: Discount rate = 40% on the marked price. Step 5: After a 40% discount, the customer pays 60% of the marked price, so multiplier = 1 - 40 / 100 = 0.60. Step 6: Selling price (SP) = MP * 0.60 = 2000 * 0.60 = Rs 1200. Step 7: Therefore the final selling price is Rs 1200.

Verification / Alternative check:
We can interpret the net effect directly on the cost price. The overall multiplier is 2.5 (markup) times 0.60 (discount), which gives 2.5 * 0.60 = 1.5. This means that the final selling price is 150% of the cost price, or a 50% profit on cost. Calculating 1.5 * 800 gives 1200, exactly matching the stepwise result. This confirms both that the arithmetic is correct and that the retailer still gains a 50% profit despite the seemingly large discount.

Why Other Options Are Wrong:
A selling price of Rs 1500 would correspond to a larger net multiplier, giving a higher profit rate than 50%. A price of Rs 1000 would be only 25% above the cost price and does not follow from a 2.5 times markup followed by a 40% discount. A selling price of Rs 2000 would represent the marked price before any discount and ignores the 40% reduction. Only Rs 1200 is consistent with both the stated markup and the discount percentage.

Common Pitfalls:
One common error is to subtract the percentages directly, for example saying 150% minus 40% equals 110% profit, which is incorrect because the discount applies to the marked price, not to the cost price. Another mistake is to compute 40% of the cost price instead of 40% of the marked price. To avoid these issues, always write explicit multiplication factors for each percentage step and apply them in order to the correct base amount.

Final Answer:
The final selling price of the article is Rs 1200.