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The Starbeans cafe has recently hired a new manager. The manager, with

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The Starbeans cafe has recently hired a new manager. The manager, with  [#permalink]

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New post Updated on: 14 Mar 2017, 11:24
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The Starbeans cafe has recently hired a new manager. The manager, within a few days of joining, made some drastic changes as a result of which the number of people visiting Starbeans everyday fell by almost 40%. However the revenue during this same period almost doubled.

Which of the following, if true, most helps to explain how the revenues of Starbeans increased despite the falling footfalls?

(A) The manager appointed a new coffee bean supplier who charges much lower rates than did the earlier supplier, resulting in substantial cost savings.
(B) The manager changed the interior of the cafe, making the seats much more comfortable than the earlier seats and adding more colour to the walls.
(C) The manager’s monthly salary is directly linked to the revenue; the more the revenue the more salary he gets.
(D) The manager increased the average price of every item on the menu, in some cases even doubling the original price
(E) The manager fired some of the staff, thereby cutting down Starbean’s salary cost by half.

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Originally posted by carcass on 17 Jan 2017, 09:58.
Last edited by Bunuel on 14 Mar 2017, 11:24, edited 1 time in total.
Renamed the topic.
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Re: The Starbeans cafe has recently hired a new manager. The manager, with  [#permalink]

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New post 17 Jan 2017, 10:54
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carcass wrote:
The Starbeans cafe has recently hired a new manager. The manager, within a few days of joining, made some drastic changes as a result of which the number of people visiting Starbeans everyday fell by almost 40%. However the revenue during this same period almost doubled.

Which of the following, if true, most helps to explain how the revenues of Starbeans increased despite the falling footfalls?

(A) The manager appointed a new coffee bean supplier who charges much lower rates than did the earlier supplier, resulting in substantial cost savings.
(B) The manager changed the interior of the cafe, making the seats much more comfortable than the earlier seats and adding more colour to the walls.
(C) The manager’s monthly salary is directly linked to the revenue; the more the revenue the more salary he gets.
(D) The manager increased the average price of every item on the menu, in some cases even doubling the original price
(E) The manager fired some of the staff, thereby cutting down Starbean’s salary cost by half.



A and E may contribute in profits, but it can not increase the revenue. Only D can explain why revenue increased. I think d is the answer.
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Re: The Starbeans cafe has recently hired a new manager. The manager, with  [#permalink]

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New post 14 Mar 2017, 09:29
"the number of people visiting Starbeans everyday fell by almost 40%"

a-doesn't explain fewer customers
b-opposite (would theoretically encourage more customers)
c-explains higher revenues but doesn't explain fewer customers
d-CORRECT explains why revenues went up and customers went down...more revenue per customer
e-customers would not necessarily know, be upset, or stop patroning due to employee firings..and this would be an lower expense, not a higher revenue

Thus, D.
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Re: The Starbeans cafe has recently hired a new manager. The manager, with  [#permalink]

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New post 01 Apr 2018, 01:31
The Starbeans cafe has recently hired a new manager. The manager, within a few days of joining, made some drastic changes as a result of which the number of people visiting Starbeans everyday fell by almost 40%. However the revenue during this same period almost doubled.

Which of the following, if true, most helps to explain how the revenues of Starbeans increased despite the falling footfalls?

(A) The manager appointed a new coffee bean supplier who charges much lower rates than did the earlier supplier, resulting in substantial cost savings. - Not necessary it would increase the revenue
(B) The manager changed the interior of the cafe, making the seats much more comfortable than the earlier seats and adding more colour to the walls. Out of Scope, no impact
(C) The manager’s monthly salary is directly linked to the revenue; the more the revenue the more salary he gets. Out of Scope, no impact
(D) The manager increased the average price of every item on the menu, in some cases even doubling the original price - CORRECT, increase in average prices of the menu items shall increase the revenue despite of the fact number of people arriving is less
(E) The manager fired some of the staff, thereby cutting down Starbean’s salary cost by half. Out of Scope, no impact
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Re: The Starbeans cafe has recently hired a new manager. The manager, with  [#permalink]

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New post 24 Apr 2018, 21:51
So we are assuming No of people = No of sales. Wow!

Nice.
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Re: The Starbeans cafe has recently hired a new manager. The manager, with  [#permalink]

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New post 23 Feb 2019, 03:24
Meaning: The author says that a cafe called Starbeans cafe recently hired a new manager who, after his appointment at the cafe, made some drastic changes in the cafe, leading to 40% decrease in footfall in the cafe but increase in the overall revenue of the cafe.

Qst stem: Question asks her to solve the paradox that even though the number of customers visiting the cafe decreased by 40%, the revenue increased.

Logic: Revenue = Earnings - Costs. Correct answer choice will give us information about Earnings/Costs whose increase/decrease more than compensated for the 40% decrease in number of customers visiting the cafe.

Answer: D

Note: Choice A is not the correct answer even though it states that an action of the new manager lead to decrease in a component of the cost because it does not clarify if this decrease in cost more than compensated for the 40% decrease in number of customers visiting the cafe and helped in increase of the revenue.
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Re: The Starbeans cafe has recently hired a new manager. The manager, with   [#permalink] 23 Feb 2019, 03:24
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