QUESTION 5 of 10: You have a popular product. You decide to set its price at 3 times cost. What is your percentage margin on the product?
a) 33%
67%
100%
300%



Answer :

To calculate the percentage margin on a product, we start by defining the terms involved in the problem:

- Cost: The amount it takes to produce or purchase the product.
- Price: The amount at which the product is sold to customers.
- Margin: The difference between the selling price and the cost.

The margin can also be calculated as a percentage, which is called the percentage margin. This is determined by dividing the margin by the price and then converting it to a percentage.

Given that the price is set at 3 times the cost, we represent the cost as 'C' and the price as 'P'. Thus:

P = 3C

Now we want to find the margin:

Margin = P - C
Margin = 3C - C

Now, we simplify the margin equation:

Margin = 3C - C
Margin = 2C

To find the percentage margin, we divide the margin by the price and then multiply by 100 to convert it to a percentage:

Percentage Margin = (Margin / P) 100

Substitute Margin and P in the above formula:

Percentage Margin = ((2C) / (3C))
100

Cancelling out 'C' from the numerator and denominator (since it's a common factor and not equal to zero), we get:

Percentage Margin = (2 / 3) 100

Now we calculate the numerical value:

Percentage Margin = 0.6666...
100

When converted to a percentage, this is:

Percentage Margin = 66.6666...%

In terms of percentage points, this is commonly rounded to the nearest whole number, so:

Percentage Margin ≈ 67%

Therefore, the correct answer to the question is:

b) 67%