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What is a Marked Price?
Grade Level:
Class 5
Finance, Economics, Maths, Business
Definition
What is it?
The Marked Price (MP) is the price written or 'marked' on an item by the shopkeeper. It is the price at which the item is intended to be sold before any discounts are offered.
Simple Example
Quick Example
Imagine you go to a shop to buy a new cricket bat. You see a sticker on the bat that says '₹1500'. This '₹1500' is the Marked Price of the cricket bat.
Worked Example
Step-by-Step
A toy car has a price tag that says '₹499'. What is its Marked Price?
---Step 1: Identify the item and the price shown on its tag.
---Step 2: The item is a toy car, and the price on its tag is ₹499.
---Step 3: The price written on the item is its Marked Price.
---Answer: The Marked Price of the toy car is ₹499.
Why It Matters
Understanding Marked Price helps you calculate discounts and final costs, which is important for smart shopping and managing money. It's crucial for shop owners to decide prices and for businesses to set profit margins.
Common Mistakes
MISTAKE: Thinking Marked Price is always the final price you pay. | CORRECTION: Marked Price is the initial price; the final price can be lower after discounts.
MISTAKE: Confusing Marked Price with Cost Price (the price at which a shopkeeper buys the item). | CORRECTION: Marked Price is what the shopkeeper writes on the item for sale. Cost Price is what they paid to buy it.
MISTAKE: Assuming a discount is always applied to the Marked Price. | CORRECTION: While usually true, sometimes special offers apply to a different price, but generally, discounts are calculated on the Marked Price.
Practice Questions
Try It Yourself
QUESTION: A new storybook has a sticker showing '₹250'. What is its Marked Price? | ANSWER: ₹250
QUESTION: If a pair of shoes has '₹1200' printed on its box, what does this '₹1200' represent? | ANSWER: It represents the Marked Price of the shoes.
QUESTION: A bicycle shop puts a tag of '₹5500' on a bicycle. Later, they offer a ₹500 discount. What was the Marked Price of the bicycle before the discount? | ANSWER: ₹5500
MCQ
Quick Quiz
What is the price written on an item by the seller before any discount is given?
Selling Price
Cost Price
Marked Price
Net Price
The Correct Answer Is:
C
The Marked Price is specifically the price written on the item. Selling Price is what it's actually sold for, which can be different after a discount. Cost Price is what the seller paid for it.
Real World Connection
In the Real World
Next time you visit a supermarket like Reliance Fresh or a clothing store like Lifestyle, look at the price tags on items. The price printed on these tags is the Marked Price. This helps you compare prices and see how much discount you might get during a sale.
Key Vocabulary
Key Terms
MARKED PRICE (MP): The price written on an item by the seller | DISCOUNT: A reduction in the Marked Price | SELLING PRICE (SP): The actual price at which an item is sold | COST PRICE (CP): The price at which a seller buys an item
What's Next
What to Learn Next
Great job understanding Marked Price! Next, you should learn about 'Discount'. Discount is usually calculated on the Marked Price, so knowing this concept will make understanding discounts much easier.
