To find the cost price of the item, we need to first calculate the selling price after the discount.

The shopkeeper gives a 40% discount, which means the customer pays only 60% of the original price. So, the selling price of the item will be 60% (or 0.60) of the marked price.

Let`s calculate the selling price:

Selling price = 0.60 * 2000

= 1200

The question states that the shopkeeper incurs a loss of 25% on this selling price. This means that the cost price is 75% (or 0.75) of the selling price.

Let`s calculate the cost price:

Cost price = 0.75 * 1200

= 900

However, none of the provided options match the calculated cost price of 900. Therefore, the correct answer should be "Alert - correct answer should be 900".