- = model cost × markup %
- = mp%
|$1 + 20% = $1.2||First markup 20%|
|$1.20 + 30% = $1.56||Second middleman markup 30%|
After implemented GST 6%.
|$1 + 6% = $1.06||No GST upon raw product|
|$1.06 + 20% + 6% = $1.332||First markup|
|$1.332 + 30% + 6% = $1.84||Second markup|
Let assume all markups, p are equal. So after GST selling price total times of middleman transferred.
- 1.062(1+p) m
- 1.063(1+p)2 m
- 1.06n+1(1+p)n m
Finally come out.
- Selling price after GST 6% = 1.06n+1pn m
- n = total time of middleman transferred
- p = after markup %
- m = model cost
Increment or Inflation
- = 1.06n+1pn m/ pn m
- = 1.06n+1
Now we can calculate how many times the product get transfer to end of consumer by assuming all markups are same.