In a stock clearance sale, a shopkeeper gives 40% off on all his items. He incurs a loss of 25% by selling an item of marked price Rs. 2,000/-, which one of the following is the cost price of the item?

Correct option is C

Given:
Marked Price (MP) = Rs. 2,000

Discount = 40%

Loss = 25%

Need to find Cost Price (CP)

Formula Used:
Selling Price (SP) = Marked Price × (1 − Discount%)

Cost Price (CP) = Selling Price ÷ (1 − Loss%)

Solution:
Step 1: Calculate Selling Price
SP = 2000 × (1 − 40/100) = 2000 × 0.60 = Rs. 1,200

Step 2: Use loss formula to find CP
Since loss = 25%, SP = 75% of CP

=> CP = SP ÷ 0.75 = 1200 ÷ 0.75 = Rs. 1,600

Ans. (c) Rs. 1,600/-