Selling Price in Terms of Marked Price and Discount

Oct 13, 2025 by talynt.org 8 views

Understanding the Relationship Between Marked Price, Discount, and Selling Price

In the world of business, understanding the relationship between the marked price, discount, and selling price is crucial for making informed decisions. In this article, we will delve into the concept of marked price, discount, and selling price, and explore how they are related.

What is Marked Price?

The marked price, also known as the list price or sticker price, is the price at which a product is displayed in a store or advertised in a catalog. It is the price that the manufacturer or supplier recommends to the retailer, and it is usually the price that the retailer charges to the customer. In the case of the computer mentioned in the problem, the marked price is Rs. 50,000.

What is Discount?

A discount is a reduction in the marked price of a product. It is a percentage or amount that is subtracted from the marked price to arrive at the selling price. Discounts can be offered for various reasons, such as to clear out old inventory, to attract new customers, or to compete with other retailers. In the case of the computer, the discount is Rs. 28,750 (Rs. 50,000 - Rs. 21,250).

What is Selling Price?

The selling price, also known as the transaction price, is the price at which a product is sold to a customer. It is the price that the retailer charges to the customer, and it is usually the price that the customer pays. In the case of the computer, the selling price is Rs. 21,250.

Relationship Between Marked Price, Discount, and Selling Price

Now that we have defined the terms, let's explore the relationship between the marked price, discount, and selling price. The selling price is equal to the marked price minus the discount. Mathematically, this can be represented as:

SP = MP - D

Where SP is the selling price, MP is the marked price, and D is the discount.

Selling Price in Terms of Marked Price and Discount

Using the formula above, we can express the selling price in terms of the marked price and discount. If we are given the marked price and discount, we can calculate the selling price by subtracting the discount from the marked price.

Example

Let's use the example of the computer to illustrate this concept. The marked price of the computer is Rs. 50,000, and the discount is Rs. 28,750. To calculate the selling price, we can subtract the discount from the marked price:

SP = MP - D = Rs. 50,000 - Rs. 28,750 = Rs. 21,250

Therefore, the selling price of the computer is Rs. 21,250.

Conclusion

In conclusion, the marked price, discount, and selling price are related concepts in the world of business. The selling price is equal to the marked price minus the discount. By understanding this relationship, retailers can make informed decisions about pricing and discounts, and customers can make informed decisions about purchasing products.

Key Takeaways

The marked price is the price at which a product is displayed in a store or advertised in a catalog.
A discount is a reduction in the marked price of a product.
The selling price is the price at which a product is sold to a customer.
The selling price is equal to the marked price minus the discount.
By understanding the relationship between the marked price, discount, and selling price, retailers can make informed decisions about pricing and discounts.

Frequently Asked Questions

Q: What is the marked price of a product? A: The marked price is the price at which a product is displayed in a store or advertised in a catalog.
Q: What is a discount? A: A discount is a reduction in the marked price of a product.
Q: What is the selling price of a product? A: The selling price is the price at which a product is sold to a customer.
Q: How is the selling price related to the marked price and discount? A: The selling price is equal to the marked price minus the discount.

References

[1] Business Dictionary. (n.d.). Marked Price. Retrieved from https://www.businessdictionary.com/definition/marked-price.html
[2] Investopedia. (n.d.). Discount. Retrieved from https://www.investopedia.com/terms/d/discount.asp
[3] AccountingTools. (n.d.). Selling Price. Retrieved from https://www.accountingtools.com/articles/selling-price
Frequently Asked Questions: Marked Price, Discount, and Selling Price

In our previous article, we explored the relationship between the marked price, discount, and selling price. In this article, we will answer some frequently asked questions about these concepts.

Q: What is the marked price of a product?

A: The marked price, also known as the list price or sticker price, is the price at which a product is displayed in a store or advertised in a catalog. It is the price that the manufacturer or supplier recommends to the retailer, and it is usually the price that the retailer charges to the customer.

Q: What is a discount?

A: A discount is a reduction in the marked price of a product. It is a percentage or amount that is subtracted from the marked price to arrive at the selling price. Discounts can be offered for various reasons, such as to clear out old inventory, to attract new customers, or to compete with other retailers.

Q: What is the selling price of a product?

A: The selling price, also known as the transaction price, is the price at which a product is sold to a customer. It is the price that the retailer charges to the customer, and it is usually the price that the customer pays.

Q: How is the selling price related to the marked price and discount?

A: The selling price is equal to the marked price minus the discount. Mathematically, this can be represented as:

SP = MP - D

Where SP is the selling price, MP is the marked price, and D is the discount.

Q: What is the difference between a discount and a sale?

A: A discount is a reduction in the marked price of a product, while a sale is a temporary reduction in the price of a product. A sale is usually a one-time offer, while a discount is a permanent reduction in the price of a product.

Q: Can a product have multiple discounts?

A: Yes, a product can have multiple discounts. For example, a retailer may offer a 10% discount on a product, and then offer an additional 5% discount on top of that. The selling price would be the marked price minus the total discount.

Q: How do I calculate the selling price of a product with multiple discounts?

A: To calculate the selling price of a product with multiple discounts, you need to subtract each discount from the marked price in the correct order. For example, if the marked price is Rs. 100, and you offer a 10% discount, followed by a 5% discount, the selling price would be:

SP = MP - (D1 + D2) = Rs. 100 - (Rs. 10 + Rs. 5) = Rs. 85

Q: Can a product have a negative selling price?

A: No, a product cannot have a negative selling price. The selling price is always equal to or greater than the marked price minus the discount.

Q: What is the difference between a discount and a promotion?

A: A discount is a reduction in the marked price of a product, while a promotion is a marketing campaign that encourages customers to buy a product. A promotion can include discounts, but it can also include other incentives, such as free shipping or a free gift.

Q: Can a product have multiple promotions?

A: Yes, a product can have multiple promotions. For example, a retailer may offer a discount on a product, and then offer a free shipping promotion on top of that.

Q: How do I calculate the selling price of a product with multiple promotions?

A: To calculate the selling price of a product with multiple promotions, you need to consider each promotion separately. For example, if the marked price is Rs. 100, and you offer a 10% discount, followed by a free shipping promotion, the selling price would be:

SP = MP - D = Rs. 100 - Rs. 10 = Rs. 90

Since the product is eligible for free shipping, the selling price remains the same.

Conclusion

In conclusion, the marked price, discount, and selling price are related concepts in the world of business. Understanding these concepts can help retailers make informed decisions about pricing and promotions, and customers can make informed decisions about purchasing products.

Key Takeaways

The marked price is the price at which a product is displayed in a store or advertised in a catalog.
A discount is a reduction in the marked price of a product.
The selling price is the price at which a product is sold to a customer.
The selling price is equal to the marked price minus the discount.
A product can have multiple discounts and promotions.
To calculate the selling price of a product with multiple discounts and promotions, you need to consider each promotion separately.

Frequently Asked Questions

Q: What is the marked price of a product? A: The marked price is the price at which a product is displayed in a store or advertised in a catalog.
Q: What is a discount? A: A discount is a reduction in the marked price of a product.
Q: What is the selling price of a product? A: The selling price is the price at which a product is sold to a customer.
Q: How is the selling price related to the marked price and discount? A: The selling price is equal to the marked price minus the discount.
Q: Can a product have multiple discounts? A: Yes, a product can have multiple discounts.
Q: How do I calculate the selling price of a product with multiple discounts? A: To calculate the selling price of a product with multiple discounts, you need to subtract each discount from the marked price in the correct order.

References

[1] Business Dictionary. (n.d.). Marked Price. Retrieved from https://www.businessdictionary.com/definition/marked-price.html
[2] Investopedia. (n.d.). Discount. Retrieved from https://www.investopedia.com/terms/d/discount.asp
[3] AccountingTools. (n.d.). Selling Price. Retrieved from https://www.accountingtools.com/articles/selling-price