Study Guide · Chapter 3
2.1 Cost Price, Selling Price, and Marked Price — Definitions
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- Cost Price (CP): The price at which an article is purchased or produced. This is the “investment” of the seller.
- Selling Price (SP): The price at which the article is actually sold to the customer.
- Marked Price (MP) (also called List Price or Printed Price): The price printed on the tag/label, before any discount is applied. MP is what a shopkeeper “quotes” to attract negotiation; the customer usually pays less than MP after discount.
The order of magnitude in a typical discounted-sale problem is:
MP ≥ SP, and the relationship between SP and CP decides profit or loss. MP and CP are, in general, independent of each other — a shopkeeper decides MP based on how much discount he wants to appear to offer, while CP is fixed by what he paid to acquire the goods.
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