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sahitiyalavarthi
I think this is a poor-quality question. This question is from gmat club tests. On the gmat club page, Bunuel only agrees this question is worded wrong. Why are you guys taking so much money (99 dollars) and giving us all not old questions. Yesterday, I saw geometry question. These questions pool is not updated with gmat focus.
Where did I say that this question is "worded wrong"? The question was recently updated and its wording is fine!

Also, which geometry question did you encounter on the tests?

All quant questions were recently updated, and the tests do not contain any geometry questions.


 
­I am so sorry Bunuel. I don't know how I landed on the old version of this question which mentions "sale price" and was referring to that. My bad. I am very sorry and I deleted the earlier comment. 

And the question I was referring to was cube and percents. 

Sorry and thank you for your support. ­
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why is it that the sum of cost price = 20,000 here and not sum of sales price? since its total sales? Bunuel
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why is it that the sum of cost price = 20,000 here and not sum of sales price? since its total sales? Bunuel

Profit and loss are calculated based on the cost price, not the sales price. The question states that the dealership made a 5% overall profit, which is applied to the total cost price of the two cars.

So, the total cost price of the two cars was $20,000, and the 5% profit on this amount equals $1,000. This is why the sum of the cost prices is considered here, not the sales prices.
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A car dealership sold two cars: Car A at a 10% profit and Car B at a 10% loss, resulting into an overall profit of 5% from the two sales. If the dealership's profit from these two cars was $1,000, what was the initial cost of cars A and B?

A. $5,000 and $1,000
B. $9,000 and $5,000
C. $11,000 and $9,000
D. $15,000 and $5,000
E. $20,000 and $10,000

A(1+10/100) + B(1-10/100) = (A+B)(1+5/100);

Overall Profit: (A+B)(5/100) = 1000

Solve These two equations and you will get your answer as A = 15000; B = 5000;
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I did not quite understand the question and I like the solution - it’s helpful. i think that the question should say what were the initial prices of cars A and B not costs. the word costs makes it confusing as profit margin is calculated on revenue not on costs
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Thanks for the feedback! I may have written this question a long time ago - sounds like something I would have done.
What if we change it to say "What was the dealer's cost for Cars A and B" - would that clarify the question in your view?

simooo123
I did not quite understand the question and I like the solution - it’s helpful. i think that the question should say what were the initial prices of cars A and B not costs. the word costs makes it confusing as profit margin is calculated on revenue not on costs
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Thanks for the feedback! I may have written this question a long time ago - sounds like something I would have done.
What if we change it to say "What was the dealer's cost for Cars A and B" - would that clarify the question in your view?

simooo123
I did not quite understand the question and I like the solution - it’s helpful. i think that the question should say what were the initial prices of cars A and B not costs. the word costs makes it confusing as profit margin is calculated on revenue not on costs

I think the question is fine as it is. Also, profit and loss are calculated based on the cost price, not the sales price.
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My understunding is that when it says at a 10% profit it means that the product what sold at let's say 15000 and the profit was 1500 which is 10% of 15000 which means that cost accounted to 15000-1500 = 13500.
I think that the question asking for costs makes it confusing as it is actually asking for the sale price
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simooo123
My understunding is that when it says at a 10% profit it means that the product what sold at let's say 15000 and the profit was 1500 which is 10% of 15000 which means that cost accounted to 15000-1500 = 13500.
I think that the question asking for costs makes it confusing as it is actually asking for the sale price

I tried explaining several times in this thread:

Profit and loss are calculated based on the cost price, not the sales price. The question states that the dealership made a 5% overall profit, which is applied to the total cost price of the two cars.
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simooo123
My understunding is that when it says at a 10% profit it means that the product what sold at let's say 15000 and the profit was 1500 which is 10% of 15000 which means that cost accounted to 15000-1500 = 13500.
I think that the question asking for costs makes it confusing as it is actually asking for the sale price
never mind i checked I had a misunderstunding of what at a 10% profit meant. It actually means 10% markup above the cost of the good.
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Bunuel
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My understunding is that when it says at a 10% profit it means that the product what sold at let's say 15000 and the profit was 1500 which is 10% of 15000 which means that cost accounted to 15000-1500 = 13500.
I think that the question asking for costs makes it confusing as it is actually asking for the sale price

I tried explaining several times in this thread:

Profit and loss are calculated based on the cost price, not the sales price. The question states that the dealership made a 5% overall profit, which is applied to the total cost price of the two cars.
I think this misunderstunding stems from the general idea that profit margin is calculated over revenue: profit/revenue *100

but in this cause when it says "at a profit of" it is calculated on costs of purchase of the good rather than on revenue
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My understunding is that when it says at a 10% profit it means that the product what sold at let's say 15000 and the profit was 1500 which is 10% of 15000 which means that cost accounted to 15000-1500 = 13500.
I think that the question asking for costs makes it confusing as it is actually asking for the sale price

I tried explaining several times in this thread:

Profit and loss are calculated based on the cost price, not the sales price. The question states that the dealership made a 5% overall profit, which is applied to the total cost price of the two cars.
I think this misunderstunding stems from the general idea that profit margin is calculated over revenue: profit/revenue *100

but in this cause when it says "at a profit of" it is calculated on costs of purchase of the good rather than on revenue

Profit and profit margin are different:

Profit percentage is calculated based on cost price:
Profit Percentage = (Profit / Cost Price) * 100

Profit margin is calculated based on selling price (revenue):
Profit Margin = (Profit / Revenue) * 100
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I like the solution - it’s helpful.
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I like the solution - it’s helpful.
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I like the solution - it’s helpful.
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I like the solution - it’s helpful.
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