A merchant buys tea at ₹100 per kg and sells it using a 800 g weight as 1 kg, after marking the price up by 25% and giving a discount of 20%. What is his profit per kg?
₹25
Cost price of tea \(= ₹100\) per kg, so cost of the \(800\text{ g}\) he actually gives \(= ₹80\).
He marks up the price of 1 kg by 25%: marked price \(= 100 \times 1.25 = ₹125\).
He then gives a discount of 20% on this marked price: selling price \(= 125 \times 0.80 = ₹100\).
He collects ₹100 from the customer but his actual cost for the 800 g given was only ₹80.
Profit per kg (i.e., per such transaction) \(= 100 - 80 = ₹20\).
Hence, his profit per kg is ₹20.
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