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# Leo can buy a certain computer for p1 dollars in State A

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Intern
Joined: 13 Sep 2017
Posts: 8
Re: Leo can buy a certain computer for p1 dollars in State A  [#permalink]

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18 Nov 2017, 20:39
Bunuel wrote:
prabhakarsharma wrote:
Hi All,
Am new to GMAT , so forgive me if my question sounds very basic.

I think A should be correct Answer.

Why can't we assume P1 as the base price of computer + tax on it. As the question says "Leo can buy a certain computer for P1 dollars in state A, where the sales tax is t1 percent". So it does sounds like P1 is the final cost.

If this is right than same goes for P2.

So,

Total price of computer = Base price of computer + tax incurred on it.

As Leo is buying same computer in state A and State B we can assume , that Base price of computer will remain same. So the differentiating factor will be whether the tax incurred is higher in state A or State B.

Following this line of thought i think A should be correct Answer . As it says t1 > t2 . We can easily say that total price in state A will be higher than State B.

Note that this is a GMAT Prep question and the correct answer is E.

Also, note that that the prices p1 and p2 are NOT the same.

Hi Bunuel,

First, thanks for your great explanation always. In this question, would it be correct if i understand that p1.(1+t1)=p2.(1+t2)?
Since t1> t2=> 1+t1>1+t2 and from this p1<p2 . Kindly help on this! thanks alot.
Intern
Joined: 13 Sep 2017
Posts: 8
Leo can buy a certain computer for p1 dollars in State A  [#permalink]

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18 Nov 2017, 21:03
Bunuel wrote:
prabhakarsharma wrote:
Hi All,
Am new to GMAT , so forgive me if my question sounds very basic.

I think A should be correct Answer.

Why can't we assume P1 as the base price of computer + tax on it. As the question says "Leo can buy a certain computer for P1 dollars in state A, where the sales tax is t1 percent". So it does sounds like P1 is the final cost.

If this is right than same goes for P2.

So,

Total price of computer = Base price of computer + tax incurred on it.

As Leo is buying same computer in state A and State B we can assume , that Base price of computer will remain same. So the differentiating factor will be whether the tax incurred is higher in state A or State B.

Following this line of thought i think A should be correct Answer . As it says t1 > t2 . We can easily say that total price in state A will be higher than State B.

Note that this is a GMAT Prep question and the correct answer is E.

Also, note that that the prices p1 and p2 are NOT the same.

Hi Bunuel, i am clear now. When i read "the same computer", i assume myself that Cost1= Cost2 which is p1(1+t1)=p2(1+t2). However, it doesn't mean that in the question. Thanks and sorry for bothering.
Manager
Joined: 10 Apr 2018
Posts: 180
Re: Leo can buy a certain computer for p1 dollars in State A  [#permalink]

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11 Sep 2018, 15:21
1
Hi ,

here are my two cents for this question

In county A let $$p_1$$ be price before tax, $$t_1$$be the tax
then total price in county A is say M=$$p_1$$+$$p_1t_1$$
In county B let $$p_2$$ be price before tax, $$t_2$$be the tax
then total price in county B is say N= $$p_2$$+$$p_2t_2$$

To answer this question we need to know that tax rates at each county, and base price at each county / or we need to know the ratio of prices and ratio of taxes to come to conclusion about the comparison of prices.

Now Stmt 1:$$t_1$$> $$t_2$$. OK we can have two case results from this.

Case a:$$p_1$$>$$p_2$$ Say $$p_1$$= 150, $$p_2=100,$$$$t_1=20$$, $$t_2=10$$, then we have
$$t_1$$> $$t_2$$
M= 150+30 & N=100+10. (Here we have$$p_1t_1$$> $$p_2t_2$$, or 30>10)
So M=180,N=110
We have from this that M>N

Case b:$$p_1$$<$$p_2$$ Say $$p_1$$= 100, $$p_2=150,$$$$t_1=20$$, $$t_2=10$$, then we have
$$t_1$$> $$t_2$$
M= 100+20 & N=150+15. (Here we have$$p_1t_1$$> $$p_2t_2$$, or 20>15)
So M=120,N=165
We have from this that M<N

So Stm1 Insufficient

Now Stmt 2: $$p_1t_1$$> $$p_2t_2$$. We can have several cases from this , however if we refer our stmt 1 (the highlighted portion ) we already have $$p_1t_1$$> $$p_2t_2$$. and we did get different answers on each case.

So Stm2 Insufficient
Other cases except those not discussed in statement 1 can be
Say $$p_1=p_2$$ & $$t_1$$> $$t_2$$

Say Say $$p_1=p_2$$ =150 and $$t_1$$= 20 and $$t_2$$=10

we will have M= 150+30 &N= 150+10 so 180>160or M>N

Say $$p_1>p_2$$ & $$t_1$$= $$t_2$$ Say $$t_1$$= $$t_2$$ = 20 Say$$p_1$$= 150 and $$p_2$$= 100,then we have
M= 150+30
N=100+20
we have M>N

Now if we combine both statements , there is no new information, Hence E

Probus
Re: Leo can buy a certain computer for p1 dollars in State A &nbs [#permalink] 11 Sep 2018, 15:21

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