GMAT Question of the Day - Daily to your Mailbox; hard ones only

 It is currently 23 Feb 2019, 05:05

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

## Events & Promotions

###### Events & Promotions in February
PrevNext
SuMoTuWeThFrSa
272829303112
3456789
10111213141516
17181920212223
242526272812
Open Detailed Calendar
• ### Free GMAT RC Webinar

February 23, 2019

February 23, 2019

07:00 AM PST

09:00 AM PST

Learn reading strategies that can help even non-voracious reader to master GMAT RC. Saturday, February 23rd at 7 AM PT
• ### FREE Quant Workshop by e-GMAT!

February 24, 2019

February 24, 2019

07:00 AM PST

09:00 AM PST

Get personalized insights on how to achieve your Target Quant Score.

# Each customer of a networking company subscribes to one of two plans:

Author Message
TAGS:

### Hide Tags

Math Expert
Joined: 02 Sep 2009
Posts: 53066
Each customer of a networking company subscribes to one of two plans:  [#permalink]

### Show Tags

29 Jul 2015, 14:46
00:00

Difficulty:

95% (hard)

Question Stats:

39% (02:09) correct 61% (01:47) wrong based on 167 sessions

Each customer of a networking company subscribes to one of two plans: Plan A or Plan B. Plan A costs $75 per month and Plan B costs$175 per month per customer. If the company’s average revenue per customer per month is $100, then what percent of the company's revenue comes from customers with Plan A? A. 25% B. 30% C. 37.5% D. 56.25% E. 75% Kudos for a correct solution. _________________ Senior Manager Joined: 15 Sep 2011 Posts: 321 Location: United States WE: Corporate Finance (Manufacturing) Each customer of a networking company subscribes to one of two plans: [#permalink] ### Show Tags 29 Jul 2015, 15:28 2 Bunuel wrote: Each customer of a networking company subscribes to one of two plans: Plan A or Plan B. Plan A costs$75 per month and Plan B costs $175 per month per customer. If the company’s average revenue per customer per month is$100, then what percent of the company's revenue comes from customers with Plan A?

A. 25%
B. 30%
C. 37.5%
D. 56.25%
E. 75%

Kudos for a correct solution.

The question asks for the amount of revenue from plan A, but before the amount of revenue can be calculated, the number of units from Plan A must be calculated. If the average revenue was $100$$x$$, with $$x$$ being the quantity of total plans, the weight between 75 and 175 is $$3:1$$. Again, the question is asking what the revenue is. Thus, assume that 4 units were sold, three of the four units equals$225. $$\frac{225}{400}$$ or $$56.25$$%.

To prove that's the correct answer choice, I went through the answer choices.
A. 25% Trick answer, paired with E. Out.
B. 30% Figured percentage must be a fourth or eight of something, so since the number of units a multiple of 4, 30% is out.
C. 37.5% Paired with D. Out
D. 56.25% Correct
E. 75% Trick answer if problem were half solved. Out
Math Expert
Joined: 02 Sep 2009
Posts: 53066
Re: Each customer of a networking company subscribes to one of two plans:  [#permalink]

### Show Tags

17 Aug 2015, 08:47
2
2
Bunuel wrote:
Each customer of a networking company subscribes to one of two plans: Plan A or Plan B. Plan A costs $75 per month and Plan B costs$175 per month per customer. If the company’s average revenue per customer per month is $100, then what percent of the company's revenue comes from customers with Plan A? A. 25% B. 30% C. 37.5% D. 56.25% E. 75% Kudos for a correct solution. 800score Official Solution: This is a tricky weighted average problem. If there are only two price levels,$75 and $175, and the average customer pays$100, then the number of customers who pay $75 must be 3 times the number of customers who pay$175, since $100 is 3 times as close to$75 as it is to $175. We can show this algebraically: If there are A customers with plan A, and B customers with plan B, then the total revenue is$75A + $175B. Since the average customer pays$100, we know that
$100 = ($75A + $175B) / (A + B)$100(A + B) = ($75A +$175B)
$100A +$100B = $75A +$175B
$25A =$75B
A = 3B.

Since there are 3 times as many $75 clients as$175 clients, for every $175 received from Plan B customers, 3($75) = $225 is received from Plan A customers, and the percent of revenue from customers with Plan A is:$225/($225 +$175) = $225/$400 = 56.25%.

The correct answer is choice (D).
_________________
Current Student
Joined: 28 Nov 2014
Posts: 846
Concentration: Strategy
Schools: Fisher '19 (M$) GPA: 3.71 Re: Each customer of a networking company subscribes to one of two plans: [#permalink] ### Show Tags 31 Aug 2015, 11:39 Bunuel wrote: Bunuel wrote: Each customer of a networking company subscribes to one of two plans: Plan A or Plan B. Plan A costs$75 per month and Plan B costs $175 per month per customer. If the company’s average revenue per customer per month is$100, then what percent of the company's revenue comes from customers with Plan A?

A. 25%
B. 30%
C. 37.5%
D. 56.25%
E. 75%

Kudos for a correct solution.

800score Official Solution:

This is a tricky weighted average problem. If there are only two price levels, $75 and$175, and the average customer pays $100, then the number of customers who pay$75 must be 3 times the number of customers who pay $175, since$100 is 3 times as close to $75 as it is to$175.

We can show this algebraically:
If there are A customers with plan A, and B customers with plan B, then the total revenue is $75A +$175B.
Since the average customer pays $100, we know that$100 = ($75A +$175B) / (A + B)
$100(A + B) = ($75A + $175B)$100A + $100B =$75A + $175B$25A = $75B A = 3B. Since there are 3 times as many$75 clients as $175 clients, for every$175 received from Plan B customers, 3($75) =$225 is received from Plan A customers, and the percent of revenue from customers with Plan A is:
$225/($225 + $175) =$225/$400 = 56.25%. The correct answer is choice (D). Good Explanation Bunuel Manager Joined: 29 Jul 2015 Posts: 158 Re: Each customer of a networking company subscribes to one of two plans: [#permalink] ### Show Tags 01 Sep 2015, 04:51 1 Bunuel wrote: Each customer of a networking company subscribes to one of two plans: Plan A or Plan B. Plan A costs$75 per month and Plan B costs $175 per month per customer. If the company’s average revenue per customer per month is$100, then what percent of the company's revenue comes from customers with Plan A?

A. 25%
B. 30%
C. 37.5%
D. 56.25%
E. 75%

Kudos for a correct solution.

This question can be easily solved by using allegation.
the ratio of plan A to plan B will be
(175-100)/(100-75) =75/25 = 3/1

for every 3 plan A there is 1 plan B
so company earns 225 from 3 plan A and 175 from 1 plan B.
total 400
revenue percent from plan A will be
(225/400)*100 = 56.25 %

Intern
Joined: 30 Jan 2017
Posts: 2
Re: Each customer of a networking company subscribes to one of two plans:  [#permalink]

### Show Tags

03 Jan 2018, 06:24
consider this as a weighted mean situation:

Plan A costs: 75 & Plan B costs: 175
average costs: 100

A B
75-----------------175
100
ratio of quantities is
(175-100) : (100-75)
3 : 1

so total revenue = 3x(75) + x(175) = 400x
A's percentage = 225x/400x ----> 56.25%

EMPOWERgmat Instructor
Status: GMAT Assassin/Co-Founder
Affiliations: EMPOWERgmat
Joined: 19 Dec 2014
Posts: 13585
Location: United States (CA)
GMAT 1: 800 Q51 V49
GRE 1: Q170 V170
Re: Each customer of a networking company subscribes to one of two plans:  [#permalink]

### Show Tags

18 Mar 2018, 15:49
Hi All,

All Average Formula questions can be solved with that formula (just plug the numbers and variables into the formula). This question asks you to do MORE than just use the average formula though….

A = Number of customers for Plan A
B = Number of customers for Plan B

[75A + 175B] / [A + B] = 100

Now there's just a few algebra steps:

75A + 175B = 100A + 100B

75B = 25A

3B = A

This tells us that the number of people who bought Plan A is THREE TIMES the number of people who bought Plan B.

If B=1 and A=3 then the revenue would be:

1(175) + 3(75)

175 + 225 = 400 total dollars

The question asks "what percentage of revenue comes from Plan A"

225/400 = 9/16 = 56.25%

GMAT assassins aren't born, they're made,
Rich
_________________

760+: Learn What GMAT Assassins Do to Score at the Highest Levels
Contact Rich at: Rich.C@empowergmat.com

# Rich Cohen

Co-Founder & GMAT Assassin

Special Offer: Save \$75 + GMAT Club Tests Free
Official GMAT Exam Packs + 70 Pt. Improvement Guarantee
www.empowergmat.com/

*****Select EMPOWERgmat Courses now include ALL 6 Official GMAC CATs!*****

Re: Each customer of a networking company subscribes to one of two plans:   [#permalink] 18 Mar 2018, 15:49
Display posts from previous: Sort by