(112 – 85)/85 * 100% = 32%

(238-175)/175*100% = 36%

Average markup = (32+36)%/2 = 34%

185 = c + .34c = 1.34c

c = 185/1.34 = $138

R=mC+b

From here, you can solve this problem a couple different ways.

– First, using systems of equations:

Begin by making two different equations by substituting the data you know:

238 = 175*m + b

112 = 85*m + b

From here, you have two more options:

1. Rearrange one of the equations to get a b= or m=, and then substitute that equation into the other:

112 = 85m + b

subtract 85m from both sides

112-85m=b

substitute the b= equation into the other equation

238 = 175m + (112-85m)

Simplify

238 = 90m + 112

Subtract 112 from both sides

126 = 90m

Divide both sides by 90

m = 1.4

Now substitute the m value (slope) into either equation:

112 = 85 * (1.4) + b

112 = 119 + b

b = -7

So your equation is R = 1.4C – 7

2. Subtract the second equation from the first:

238 = 175m + b

-112 = 85m + b

————————

126 = 90m

divide both sides by 90

m = 1.4

Substitute m value into an equation (see above)

– Second, using the data points to determine slope:

To calculate slope (m), we take the ration of the change in y (or R in this case) over the change in x (or C)

m = (238-112)/(175-85)

m = 126/90

m = 1.4

Then substitute the m value into the equation along with one of the data points and solve for b:

238 = 1.4 * 175 + b

238 = 245 + b

b = -7

And you end up with: R = 1.4C – 7

To figure out what the store pays (C) for a drug that retails (R) $185, plug the R value into the equation and solve for C:

185 = 1.4*C – 7

Add 7 to each side

192 = 1.4*C

C = 137.14 (rounded)