Jake’s Cameras purchased a digital camera at a wholesale cost of $80. They marked up the price 50 percent above the wholesale cost to use as their selling price. After every month that the camera didn’t sell, the store reduced the selling price by 25 percent. After how many monthly price reductions did the price dip below the wholesale cost?
Answer
A
after 2 monthly price reductions
B
after 3 monthly price reductions
C
after 4 monthly price reductions
D
after 5 monthly price reductions
Explanation
The initial selling price was $80 × 1.50 = $120. After two 25% reductions, it was $120 × 0.75 × 0.75 = $67.50, which is below the $80 wholesale cost; after one reduction, it was still $90.
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