Lesson 2: Pricing - Calculating the Better Price of a Sales Promotion

   Constructing Knowledge

To calculate the better price of a promotion, you will use a combination of the skills you have learned in this lesson. Sometimes you will be asked to calculate the price, and other times you will be asked to discuss other factors involved in a sales promotion.

EXAMPLE 1

At Store A, last year's version of a particular video games is priced at $59.99, and there is a Buy One, Get One free promotion. At Store B, the same video game is $49.99, and there is a promotion of get 25% off any video game purchased. If Sam is buying 3 video games. Which store offers the better deal before GST is applied?

Solution


Store A: Buy one, get one free

For store A, add together the price of each game.

total price = game 1 + game 2 + game 3
= $59.99 + free + $59.99
= $119.98

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At Store A, the cost of the 3 video games before GST is $119.98.

Store B: 25% off any video game purchased

For Store B, use the shortcut that Sam pays 75% of the original price of each game, and then calculate the sale price of one game.

sale price of one game = $49.99 × 75%
= $49.99 × 0.75
= $37.49

Calculate the price of all three games.

total price = game 1 + game 2 + game 3
= $37.49 + $37.49 + $37.49
= $112.47

At Store B, the cost of 3 video games before GST is $112.47.

The better deal for three video games, cost wise, is at Store B.

   Points to Ponder

In the above example, at Store A, most people would choose a fourth game because it would be free. A fourth game at Store B would cost another $37.49. So, for the extra cost of $7.51 at Store A (the difference between purchasing the games at Store A and Store B), a person could get a fourth game.


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