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Company X is considering two venues for holding an event. Venue A dema

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Company X is considering two venues for holding an event. Venue A dema  [#permalink]

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New post 15 Jan 2019, 04:53
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A
B
C
D
E

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  45% (medium)

Question Stats:

48% (01:18) correct 52% (01:39) wrong based on 30 sessions

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Company X is considering two venues for holding an event. Venue A demands $100 per guest. Venue B demands $3000 fixed cost and an additional $40 per guest. What is the minimum number of guests that's the event must expect for the venue B to have a greater economic value?

A 30
B 40
C 50
D 51
E 60
Manager
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Joined: 12 Dec 2017
Posts: 77
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Schools: Yale '19, GMBA '20, XLRI
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Re: Company X is considering two venues for holding an event. Venue A dema  [#permalink]

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New post 15 Jan 2019, 04:55
1
Experts, I understand that the Answer has to be greater than 50.
But why 51 and not 60?
There is a difference if 40$ for 51 guests and a difference of 600$ for 60 guests.

It is silly but I can't really make out.

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Re: Company X is considering two venues for holding an event. Venue A dema  [#permalink]

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New post 15 Jan 2019, 11:24
kanakdaga wrote:
Company X is considering two venues for holding an event. Venue A demands $100 per guest. Venue B demands $3000 fixed cost and an additional $40 per guest. What is the minimum number of guests that's the event must expect for the venue B to have a greater economic value?

A 30
B 40
C 50
D 51
E 60


\(100x = 3000 + 40x\)

Or, \(60x = 3000\)

Or, \(x = 50\)

Now check,

Expense of A for x > 50 (Say 51) is : 5100
Expense of B for x > 50 (Say 51) is : 3000 + 40*51 => 5040

Hence, B is more economical...., Answer must be (D)

PS : This is simply a concept one will learn in Economics, the concept is known as Break Even Point !!! :-D
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Re: Company X is considering two venues for holding an event. Venue A dema   [#permalink] 15 Jan 2019, 11:24
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