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Did the seller earn a profit?
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16 Apr 2019, 04:29
Question Stats:
52% (01:31) correct 48% (01:44) wrong based on 33 sessions
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Did the seller earn a profit? (1) The selling price of 20 items equals the cost of 15 items. (2) The cost of 10 items is $55 greater than the selling price of 8 items. Source: GMAT Math BIBLE, p.444, q.152 Explanation from the source:
Let c and s be the cost and the selling price, respectively, for the seller on each item.
From Statement (1) alone, we have that the selling price of 20 items equals the cost of 15 items. Hence, we have 20s = 15c, or s = (\(\frac{15}{20}\))c = \(\frac{3c}{4}\). Now, profit = selling price – cost = s – c = \(\frac{3c}{4}\) – c = \(\frac{–c}{4}\), a negative value (c is price and therefore is positive. Hence, –c/4 is negative). A negative profit should be considered a loss. Hence, Statement (1) alone is sufficient to determine that the seller did not earn a profit.
From Statement (2) alone, we have that the cost of 10 items is $55 more than the selling price of 8 items. The cost of 10 items is 10c and the selling price of 8 items is 8s. Hence, we have 10c – 8s = 55. Subtracting 2s from both sides yields 10c – 10s = 55 – 2s; 10(c – s) = 55 – 2s; c – s = \(\frac{(55 – 2s)}{10}\). Now, if 55 – 2s is positive, c – s, which equals \(\frac{(55 – 2s)}{10}\), is positive. Here, Cost > Selling Price, and seller made a profit. Otherwise, he did not make a profit. 55 – 2s is not positive if s < 55/2. Hence, we have a double case and Statement (2) alone is not sufficient.
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Re: Did the seller earn a profit?
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16 Apr 2019, 05:00
Honestly, I don't like the wording of the question, but who cares 1 stm  it's clear that our selling price is less than the cost, as selling 20 items will cover the costs only for 15 items. We will lose if we sell any. Suff2 stm  10*cost8*price=55 We can manipulate a lot with two variables. Not suff IMO Ans: A



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Re: Did the seller earn a profit?
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21 Apr 2019, 02:28
chetan2u :how is statement 2 not sufficient. Please explain, i can't find a scenario where it will lead to a profit for the seller.



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Re: Did the seller earn a profit?
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21 Apr 2019, 02:55
hi Manatfor statement 2: \(10c = 8p + 55\), \(c =\) \(\frac{8p + 55}{10}\) if \(p\leq{27}\), then \(c\geq{27.1}\) > loss if \(p = 27.5\), then \(c = 27.5\) > break even (when \(p = c\), \(10c = 8c + 55\), \(2c = 55\), \(c = p = 27.5\)) if \(p\geq{28}\) , then \(c\leq{27.9}\) > profit while in statement 1, it is locked ratio and c is always greater as long as we are dealing with positive numbers. \(20s = 15c\), \(\frac{c}{s} = \frac{20}{15}\) > (we can never assume that c = p as in statement 2)
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Re: Did the seller earn a profit?
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21 Apr 2019, 03:19
how statement 1 is sufficient?



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Did the seller earn a profit?
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21 Apr 2019, 03:26
mangamma wrote: how statement 1 is sufficient? Statement 1 : 20s=15c \(\frac{s}{c}= \frac{15}{20}\) which means selling price is less than cost price, hence the seller went in loss. Question  "Did the seller earn a profit?"  Answer  No So, statement 1 is sufficient.
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Did the seller earn a profit?
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21 Apr 2019, 06:21
Manat wrote: chetan2u :how is statement 2 not sufficient. Please explain, i can't find a scenario where it will lead to a profit for the seller. Hi ManatThe difference 55 holds the key.. If the cost of two items is more than 55, then profit.. Say each costs 50, so cost of 10 items is 50*10=500. But 50055=445 is the selling price of 8 items.. so each item is sold for 445/8=~55 So profit of 5 per piece. If the cost of two items is less than 55, then loss.. Say each costs 10, so cost of 10 items is 10*10=100. But 10055=45 is the selling price of 8 items.. so each item is sold for 45/8=~5.5 So loss of 5 per piece.
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Re: Did the seller earn a profit?
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24 Apr 2019, 14:28
chetan2u wrote: Manat wrote: chetan2u :how is statement 2 not sufficient. Please explain, i can't find a scenario where it will lead to a profit for the seller. Hi ManatThe difference 55 holds the key.. If the cost of two items is more than 55, then profit.. Say each costs 50, so cost of 10 items is 50*10=500. But 50055=445 is the selling price of 8 items.. so each item is sold for 445/8=~55 So profit of 5 per piece. If the cost of two items is less than 55, then loss.. Say each costs 10, so cost of 10 items is 10*10=100. But 10055=45 is the selling price of 8 items.. so each item is sold for 45/8=~5.5 So loss of 5 per piece. what if I solve the question with Option II in the following manner : let assume the S.P. of 8 items are $X the S.P. of 1 item is $X/8 C.P of 10 items are $55 C.P of 1 items $5.5 now based on 1 item (S.P  C.P) will give us a negative value which implies the seller did loss by selling the product. Please let me know where I am thinking wrong with this procedure.




Re: Did the seller earn a profit?
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