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

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Manager
Joined: 12 Dec 2017
Posts: 77
Location: India
Schools: Yale '19, GMBA '20, XLRI
GMAT 1: 660 Q46 V35
GPA: 3.8
Company X is considering two venues for holding an event. Venue A dema  [#permalink]

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15 Jan 2019, 04:53
00:00

Difficulty:

45% (medium)

Question Stats:

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

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 $40 per guest. What is the minimum number of guests that's the event must expect for the venue B to have a greater economic value? A 30 B 40 C 50 D 51 E 60 Manager Joined: 12 Dec 2017 Posts: 77 Location: India Schools: Yale '19, GMBA '20, XLRI GMAT 1: 660 Q46 V35 GPA: 3.8 Re: Company X is considering two venues for holding an event. Venue A dema [#permalink] ### Show Tags 15 Jan 2019, 04:55 1 Experts, I understand that the Answer has to be greater than 50. But why 51 and not 60? There is a difference if 40$ for 51 guests and a difference of 600$for 60 guests. It is silly but I can't really make out. Posted from my mobile device Board of Directors Status: QA & VA Forum Moderator Joined: 11 Jun 2011 Posts: 4776 Location: India GPA: 3.5 WE: Business Development (Commercial Banking) Re: Company X is considering two venues for holding an event. Venue A dema [#permalink] ### Show Tags 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 !!!
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Abhishek....

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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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