What amount should he make the minimum selling price ?

Question

Ebay allows sellers to place a minimum selling price (called a reserve) to protect against the possibility that an item will sell for a price far below what the seller hoped to get. Ebay charges 16% commission on all items sold in auction. If Juan wants to sell an old guitar and guarantee that he receives at least $100 after paying the commission, what amount should he make the minimum selling price? 1. Define variable 2. Set up equation 3. Solve problems 4. Answer equation

Answer 1

If the minimum selling price is p and ebay takes 16% then

we receive 84% of the selling price so we want:

0.84p ≥ 100

 

p ≥ 100/0.84

 

p ≥ $119.05

 

Minimum selling price is $119.05