A merchant buys an item for $80 and marks up its price by 25%. If the merchant then offers a 20% discount on the marked-up price, what is the merchant's profit or loss percentage relative to the original cost?
✓ Correct Answer: Option B
Cost = $80. Marked price = $80 * 1.25 = $100. Selling price after 20% discount = $100 * 0.80 = $80. Since the selling price equals the cost, there is a 0% change.