Assume the original cost price is ₹100 per item and 100 items are sold.
Marked Price = Cost Price + 25% of Cost Price
MP=100+25
MP=125
In the original situation, there is no discount given.
Selling Price = ₹125
Profit per item = 125 - 100 = ₹25
Total Profit = 25 × 100 = ₹2,500
After the slump, the cost price is reduced by 5%.
New Cost Price = 100 - 5% of 100
New CP=100−5
New CP=95
The marked price remains the same at ₹125.
A discount of 8% is offered on the marked price.
Discount = 8% of 125 = ₹10
New Selling Price = 125 - 10 = ₹115
New Profit per item = Selling Price - Cost Price
New Profit per item = 115 - 95 = ₹20
Sales increase by 25%.
New quantity sold = 100 + 25% of 100
New quantity=100+25
New quantity=125
New Total Profit = 20 × 125 = ₹2,500
Change in Profit = New Total Profit - Original Total Profit
Change in Profit = 2,500 - 2,500 = ₹0
The profit remains unchanged.