Last visit was: 20 Nov 2025, 06:32 It is currently 20 Nov 2025, 06:32
Home
GMAT
Messages
Tests
Schools
Events
Rewards
Chat
My Profile
Close
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
Your Progress

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
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Go to My Error Log Learn more
Close
Request Expert Reply
Confirm Cancel
Back to Forum
Create Topic
User avatar
Ekland
User avatar
Joined: 15 Oct 2015
Last visit: 30 Apr 2023
Posts: 356
Own Kudos:
856
 [7]
Given Kudos: 342
Concentration: Finance, Strategy
Schools: Alberta"19 Fordham '18 Schulich Jan '18 Desautels '19 Haskayne(Calgary) Jindal '19 Owen '19 Olin '19 (I) Queens"18
GPA: 3.93
WE:Account Management (Education)
Schools: Alberta"19 Fordham '18 Schulich Jan '18 Desautels '19 Haskayne(Calgary) Jindal '19 Owen '19 Olin '19 (I) Queens"18
Posts: 356
Kudos: 856
 [7]
The total cost of producing in country A is less than the total cost 05 Apr 2016, 02:25
1
Kudos
Add Kudos
6
Bookmarks
Bookmark this Post
00:00
Start Timer
Pause Timer
Resume Timer
Show Answer
Hide
Show
History
E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!

Difficulty:

95% (hard)

Question Stats:

34% (01:48) correct 66% (01:56) wrong based on 307 sessions

History

Date
Time
Result
Not Attempted Yet
The total cost of producing in country A is less than the total cost of producing in country B. Price is equal in both countries. Total sales in country A is higher than total sales in country B. However country B's total revenue is higher than country A's total revenue.
Which of the following, if true, would MOST likely resolve the apparent discrepancy above?

A. Government of country A further subsidizes cost in country A.

B. Country B uses no kind of auction sales that sales to highest bidder regardless of price.

C. Country B uses archaic accounting principle.

D. Both countries are very poor but A is ruled by a highhanded dictator.

E. Both countries are not closed economy.
ShowHide Answer
Official Answer
E
User avatar
soromiso
User avatar
Joined: 04 Apr 2016
Last visit: 19 Jun 2016
Posts: 2
Posts: 2
Kudos: 0
The total cost of producing in country A is less than the total cost 05 Apr 2016, 03:25
Kudos
Add Kudos
Bookmarks
Bookmark this Post
A?


Sent from my iPhone using Tapatalk
User avatar
Ekland
User avatar
Joined: 15 Oct 2015
Last visit: 30 Apr 2023
Posts: 356
Own Kudos:
856
Given Kudos: 342
Concentration: Finance, Strategy
Schools: Alberta"19 Fordham '18 Schulich Jan '18 Desautels '19 Haskayne(Calgary) Jindal '19 Owen '19 Olin '19 (I) Queens"18
GPA: 3.93
WE:Account Management (Education)
Schools: Alberta"19 Fordham '18 Schulich Jan '18 Desautels '19 Haskayne(Calgary) Jindal '19 Owen '19 Olin '19 (I) Queens"18
Posts: 356
Kudos: 856
The total cost of producing in country A is less than the total cost 05 Apr 2016, 10:32
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Nez
The total cost of producing in country A is less than the total cost of producing in country B. Price is equal in both countries. Total sales in country A is higher than total sales in country B. However country B's total revenue is higher than country A's total revenue.
Which of the following, if true, would MOST likely resolve the apparent discrepancy above?

A. Government of country A further subsidizes cost in country A.

B. Country B uses no kind of auction sales that sales to highest bidder regardless of price.

C. Country B uses archaic accounting principle.

D. Both countries are very poor but A is ruled by a highhanded dictator.

E. Both countries are not closed economy.
Show more

There is one possible scenario that can lead to the conclusion.
This is kind of assumption.
B's revenue comes from selling elsewhere as well as from selling at home.
Other options are meaningless.
E
User avatar
umg
User avatar
Current Student
Joined: 18 Jun 2016
Last visit: 26 Jun 2020
Posts: 216
Own Kudos:
666
Given Kudos: 111
Location: United States (NY)
GMAT 1: 720 Q50 V38
GMAT 2: 750 Q49 V42
GPA: 4
WE:General Management (Other)
Products:
My Reviews
GMAT 2: 750 Q49 V42
Posts: 216
Kudos: 666
The total cost of producing in country A is less than the total cost 17 Sep 2016, 05:11
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Nezdem
The total cost of producing in country A is less than the total cost of producing in country B. Price is equal in both countries. Total sales in country A is higher than total sales in country B. However country B's total revenue is higher than country A's total revenue.
Which of the following, if true, would MOST likely resolve the apparent discrepancy above?

A. Government of country A further subsidizes cost in country A.

B. Country B uses no kind of auction sales that sales to highest bidder regardless of price.

C. Country B uses archaic accounting principle.

D. Both countries are very poor but A is ruled by a highhanded dictator.

E. Both countries are not closed economy.
Show more
Production in A < Production in B

Hence, B exports to A. Therefore, option E is the closest one to that, stating that both countries have open economy
avatar
sangarellinew
avatar
Joined: 10 Sep 2016
Last visit: 10 Mar 2018
Posts: 2
Posts: 2
Kudos: 0
The total cost of producing in country A is less than the total cost 21 Sep 2016, 03:06
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Got this wrong, logic behind E might be that cross country sales occur and as such B's sales happen in A and A's sales happen in B. Therefore Country B ends up making higher revenues since prices remain same.
User avatar
stne
User avatar
Joined: 27 May 2012
Last visit: 20 Nov 2025
Posts: 1,770
Own Kudos:
1,974
 [1]
Given Kudos: 658
Posts: 1,770
Kudos: 1,974
 [1]
The total cost of producing in country A is less than the total cost 27 Apr 2017, 01:29
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Nezdem
The total cost of producing in country A is less than the total cost of producing in country B. Price is equal in both countries. Total sales in country A is higher than total sales in country B. However country B's total revenue is higher than country A's total revenue.
Which of the following, if true, would MOST likely resolve the apparent discrepancy above?

A. Government of country A further subsidizes cost in country A.

B. Country B uses no kind of auction sales that sales to highest bidder regardless of price.

C. Country B uses archaic accounting principle.

D. Both countries are very poor but A is ruled by a highhanded dictator.

E. Both countries are not closed economy.
Show more

Can anybody confirm if the correct equation for the revenue , sales , cost, sales is as given below :

sale price per unit * total units sold = revenue.
Total revenue - total manufacturing cost= profit

If the equations are not correct then can somebody give the correct equations and explain the question . Thanks .
I am confused as to how the cost price impacts the revenue .
Cost price or manufacturing cost can impact profits but how does manufacturing cost impact revenue?

isn't revenue = Sale price per unit * total units sold ?
User avatar
VyshakhR1995
User avatar
Joined: 02 Mar 2017
Last visit: 28 Jul 2019
Posts: 228
Own Kudos:
737
 [2]
Given Kudos: 30
Location: India
Concentration: Finance, Marketing
Posts: 228
Kudos: 737
 [2]
The total cost of producing in country A is less than the total cost 27 Apr 2017, 01:53
2
Kudos
Add Kudos
Bookmarks
Bookmark this Post
stne
Nezdem
The total cost of producing in country A is less than the total cost of producing in country B. Price is equal in both countries. Total sales in country A is higher than total sales in country B. However country B's total revenue is higher than country A's total revenue.
Which of the following, if true, would MOST likely resolve the apparent discrepancy above?

A. Government of country A further subsidizes cost in country A.

B. Country B uses no kind of auction sales that sales to highest bidder regardless of price.

C. Country B uses archaic accounting principle.

D. Both countries are very poor but A is ruled by a highhanded dictator.

E. Both countries are not closed economy.

Can anybody confirm if the correct equation for the revenue , sales , cost, sales is as given below :

sale price per unit * total units sold = revenue.
Total revenue - total manufacturing cost= profit

If the equations are not correct then can somebody give the correct equations and explain the question . Thanks .
I am confused as to how the cost price impacts the revenue .
Cost price or manufacturing cost can impact profits but how does manufacturing cost impact revenue?

isn't revenue = Sale price per unit * total units sold ?
Show more


B has more revenue although Total sales in country A is higher than total sales in country B

revenue = Sale price per unit * total units sold
In this formula its given Sale price per unit is same in both country
Then for revenue to be more" total units sold" By B>A
B exports its product to A ------>all the conditions are satisfied
Hence E
User avatar
TheNightKing
User avatar
Joined: 18 Dec 2017
Last visit: 20 Mar 2024
Posts: 1,139
Own Kudos:
1,302
Given Kudos: 421
Location: United States (KS)
GMAT 1: 600 Q46 V27
GMAT 1: 600 Q46 V27
Posts: 1,139
Kudos: 1,302
The total cost of producing in country A is less than the total cost 08 Nov 2019, 10:02
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Ekland
The total cost of producing in country A is less than the total cost of producing in country B. Price is equal in both countries. Total sales in country A is higher than total sales in country B. However country B's total revenue is higher than country A's total revenue.
Which of the following, if true, would MOST likely resolve the apparent discrepancy above?

A. Government of country A further subsidizes cost in country A.

B. Country B uses no kind of auction sales that sales to highest bidder regardless of price.

C. Country B uses archaic accounting principle.

D. Both countries are very poor but A is ruled by a highhanded dictator.

E. Both countries are not closed economy.
Show more


Price is equal in both countries. - What is it trying to say? Cost Price? Sell Price? Inflation?

Just by reading this statement I could realize how bad the question is.

Coming to the Solution:
Total sales in country A is higher than total sales in country B. However country B's total revenue is higher than country A's total revenue.

One very plausible explanation would be : If they trade freely making them open economies. That is mentioned in option E. but not convinced. I was also considering A but whatever.
User avatar
nishajangir
User avatar
Joined: 23 Apr 2024
Last visit: 10 Nov 2024
Posts: 5
Own Kudos:
2
Given Kudos: 5
Posts: 5
Kudos: 2
The total cost of producing in country A is less than the total cost 09 Jun 2024, 07:28
Kudos
Add Kudos
Bookmarks
Bookmark this Post
[E]
This option suggests that both countries engage in international trade, which could explain why country B's revenue is higher despite lower domestic sales—it might be making up for it through exports or access to larger markets.
User avatar
VerbalBot
User avatar
Non-Human User
Joined: 01 Oct 2013
Last visit: 04 Jan 2021
Posts: 18,833
Own Kudos:
986
Posts: 18,833
Kudos: 986
The total cost of producing in country A is less than the total cost 28 Oct 2025, 20:33
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Moderators:
GMATNinja
GMAT Club Verbal Expert
7443 posts
GMATNinjaTwo
GMAT Club Verbal Expert
231 posts
miag
189 posts