An electronics retailer advertises a television with a marked price of ₦150,000. Under the Consumer Protection Act, the advertised price must not exceed the actual selling price by more than 5\%. The retailer applies a 12\% seasonal discount, then an 8\% loyalty discount on the reduced price, and finally a cash discount of ₦5,000. The cost price of the TV is ₦95,000.

a) Determine whether the advertised price complies with the Act.

b) If it does not, state the highest advertised price that would be compliant.

c) Calculate the retailer's profit on the sale.

Question

An electronics retailer advertises a television with a marked price of ₦150,000. Under the Consumer Protection Act, the advertised price must not exceed the actual selling price by more than 5\%. The retailer applies a 12\% seasonal discount, then an 8\% loyalty discount on the reduced price, and finally a cash discount of ₦5,000. The cost price of the TV is ₦95,000.

a) Determine whether the advertised price complies with the Act.

b) If it does not, state the highest advertised price that would be compliant.

c) Calculate the retailer's profit on the sale.

Accepted Answer

Non‑compliant; minimum compliant advertised price = ₦122,262; profit = ₦21,440

Neco 2024 Commerce Question 16

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