Profit and loss profit is the difference between the selling price and the cost price of an orticle. f the selling price is less than the cost price, the difference is called a loss. A shopkeeper or retailer purchases his goods for a certain price. This amount s called the cost price or CP. The price that the shopkeeper sells the goods to a customer is called the selling price or SP. Profit (or loss) can be calculated as SP - CP.

Let's break down the concepts of profit and loss step by step based on the information provided. ### Definitions: 1. **Cost Price (CP)**: The price at which the shopkeeper purchases the goods. 2. **Selling Price (SP)**: The price at which the shopkeeper sells the goods. 3. **Profit**: If the selling price is greater than the cost price, the difference is called profit. \[ \text{Profit} = \text{SP} - \text{CP} \] 4. **Loss**: If the selling price is less than the cost price, the difference is called loss. \[ \text{Loss} = \text{CP} - \text{SP} \] ### Steps to Calculate Profit or Loss: 1. **Identify the Cost Price (CP)**: Determine how much the shopkeeper paid for the goods. 2. **Identify the Selling Price (SP)**: Determine how much the shopkeeper sold the goods for. 3. **Calculate Profit or Loss**: - If \( \text{SP} > \text{CP} \): Calculate profit using the formula \( \text{Profit} = \text{SP} - \text{CP} \). - If \( \text{SP} < \text{CP} \): Calculate loss using the formula \( \text{Loss} = \text{CP} - \text{SP} \). ### Example Calculation: Let's say: - Cost Price (CP) = 100 - Selling Price (SP) = 120 1. **Calculate Profit**: \[ \text{Profit} = \text{SP} - \text{CP} = 120 - 100 = 20 \] In this case, the shopkeeper makes a profit of 20. Now, if the Selling Price was instead 80: - Cost Price (CP) = 100 - Selling Price (SP) = 80 1. **Calculate Loss**: \[ \text{Loss} = \text{CP} - \text{SP} = 100 - 80 = 20 \] In this case, the shopkeeper incurs a loss of 20. ### Summary: - Profit occurs when SP > CP. - Loss occurs when SP < CP. - The formulas for calculating profit and loss are straightforward and depend on the relationship between SP and CP.