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The owner of a small convenience store observed that almost all custom

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The owner of a small convenience store observed that almost all custom  [#permalink]

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New post 20 Mar 2019, 07:33
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  95% (hard)

Question Stats:

42% (02:51) correct 58% (03:19) wrong based on 155 sessions

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The owner of a small convenience store observed that almost all customers paid with credit cards regardless of whether they had cash available, resulting in significant processing charges for the store. The owner began to add a fifty-cent charge to credit card purchases under two dollars, and during the following month, virtually all customers used cash for small purchases while continuing to use credit cards for larger purchases. Nonetheless, during the month after the charge was instated, the average dollar amount of each cash transaction was almost identical to the average dollar amount of each credit card transaction.

The information in the passage most strongly supports which of the following?


A. The average dollar amount spent by customers who did not have cash available was higher after the charge was instated than it had been beforehand.

B. After the charge was instated, customers who used cash for purchases totaling two dollars or more spent more, on average, than customers who used credit cards for these purchases.

C. The average dollar amount spent in each cash transaction at the convenience store was lower after the charge was instated than beforehand.

D. A significant majority of purchases made at the convenience store during the month after the charge was instated were made using credit cards.

E. Prior to the charge, the average amount spent on credit card transactions was higher than the average amount spent on cash transactions.
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The owner of a small convenience store observed that almost all custom  [#permalink]

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New post 25 Mar 2019, 07:09
Quote:
The owner of a small convenience store observed that almost all customers paid with credit cards regardless of whether they had cash available, resulting in significant processing charges for the store. The owner began to add a fifty-cent charge to credit card purchases under two dollars, and during the following month, virtually all customers used cash for small purchases while continuing to use credit cards for larger purchases. Nonetheless, during the month after the charge was instated, the average dollar amount of each cash transaction was almost identical to the average dollar amount of each credit card transaction.

The information in the passage most strongly supports which of the following?



The most important would be to rephrase and take out inference

The owner introduced some charges on credit transactions less than $2, and almost all started paying by cash for amounts less than 2 dollars and continued with credit card transactions for larger amounts. Still the amount per cash transaction is similar to amount per card transaction. IF smaller transactions were dollar and larger were through credit card, the amount spent per credit transaction should have outweighed that per cash transaction.


Quote:
A. The average dollar amount spent by customers who did not have cash available was higher after the charge was instated than it had been beforehand.

There is nothing in the para that suggests or talks of relative expenditure through credit cards before and after.

Quote:
B. After the charge was instated, customers who used cash for purchases totaling two dollars or more spent more, on average, than customers who used credit cards for these purchases.

The lower amount when we talk of <$2 has to be taken care by some much higher cash transactions. so. if we talk of purchases worth $2 or more, the amount per cash transaction has to be more than that per card transaction. For example, if we had 10 payments costing 1$ by cash, and per card transaction is $3 for say 10 card transaction, the para says the cash transaction is also $3 on an average. If there are say 5 cash transactions above $2, (10*1+5*x)/15=3....10+5x=45 or 5x=35, that is x=7. Thus, these payments are way more than $3, that is per card transaction
CORRECT

Quote:
C. The average dollar amount spent in each cash transaction at the convenience store was lower after the charge was instated than beforehand.

As mentioned in choice B, the effect is the opposite.

Quote:
D. A significant majority of purchases made at the convenience store during the month after the charge was instated were made using credit cards.

It need not be true. Both cash transactions and card transactions can be more.

Quote:
E. Prior to the charge, the average amount spent on credit card transactions was higher than the average amount spent on cash transactions.

We are told almost all transactions were by card, but we cannot talk of the amount per transactions. There is no incentive to use cards or penalty to pay by cash. It may be that there were only 2 cash transactions and they were huge.


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Re: The owner of a small convenience store observed that almost all custom  [#permalink]

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New post 25 Mar 2019, 06:14
I am confused between E and B ?

Someone explain please
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Re: The owner of a small convenience store observed that almost all custom   [#permalink] 25 Mar 2019, 06:14
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