The marked price is ₹1,000 and a discount of 20% means the shopkeeper pays 80% of 1,000, which is ₹800. This ₹800 is the cost price. He sells at 10% above the marked price, so the selling price becomes 1,000 × 1.10 = ₹1,100. The profit is 1,100 − 800 = ₹300. The profit percentage is (300 ÷ 800) × 100 = 37.5%. Thus, his profit on the cost price is 37.5%, corresponding to Option A.
Option A:
Option A, 37.5%, corresponds exactly to (300 ÷ 800) × 100. It reflects the correct gain relative to the cost price and matches the computed fraction 3/8.
Option B:
Option B, 40%, would imply a profit of 320 on a cost of 800, which would require a selling price of 1,120, not 1,100, and thus does not fit the given data.
Option C:
Option C, 42.5%, is larger than the true computed profit percentage and would require an even higher selling price than 1,120. It overstates the profit.
Option D:
Option D, 50%, corresponds to a profit of half the cost price, i.e., 400 on 800, which again is inconsistent with a selling price of 1,100.
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