Gopal bought a cell phone and sold it to Ram at 10% profit. Then Ram wanted to sell it back to Gopal at 10% loss. What will be Gopal's position if he agreed?

(a) Neither loss nor gain
(b) Loss 1%
(c) Gain 1% ✓ UPSC's answer
(d) Gain 0·5%

Why the answer is (c)

• Let the original cost price (CP) of the phone for Gopal be 100.

• Gopal sells it to Ram at a 10% profit, so the selling price (SP) for Gopal (and CP for Ram) is 100 + 10 = 110.

• Ram sells it back to Gopal at a 10% loss on his cost price of 110.

• The selling price for Ram is 110 - (10% of 110) = 110 - 11 = 99.

• Gopal buys the phone back for 99, which is less than his original cost of 100.

• Therefore, Gopal makes a gain of 100 - 99 = 1, which is a 1% gain on his original investment.

Why the other options are wrong

(a) Neither loss nor gain: Gopal's final cost (99) is lower than his initial cost (100), resulting in a net gain, not a break-even position.
(b) Loss 1%: Gopal ends up with a lower cost basis (99 vs 100), which constitutes a gain, not a loss.
(d) Gain 0·5%: The calculation yields a difference of 1 unit on a base of 100, which is exactly 1%, not 0.5%.

Asked in the CSAT Paper II of the UPSC Civil Services Preliminary Examination 2017, held on 18 June 2017. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.