1. The problem is to understand the concepts of Cost Price (CP) and Selling Price (SP) in basic commerce and profit/loss calculations. 2. Cost Price (CP) is the price at which an item is purchased. 3. Selling Price (SP) is the price at which the item is sold. 4. Important formulas: - Profit = SP - CP (when SP > CP) - Loss = CP - SP (when CP > SP) - Profit Percentage = $\frac{\text{Profit}}{\text{CP}} \times 100$ - Loss Percentage = $\frac{\text{Loss}}{\text{CP}} \times 100$ 5. Example: If an item is bought for 100 (CP) and sold for 120 (SP), then - Profit = 120 - 100 = 20 - Profit Percentage = $\frac{20}{100} \times 100 = 20\%$ 6. If the item is sold for 80 instead, then - Loss = 100 - 80 = 20 - Loss Percentage = $\frac{20}{100} \times 100 = 20\%$ This helps in understanding how to calculate profit or loss and their percentages based on CP and SP.