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

Question

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.

nahid78 · Answer

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.

natewarden777 · Answer

"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.

vasuca10 · Answer

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

Nightmare007 · Answer

So we are assuming No of people = No of sales. Wow!

Nice.

shahsuhailp · Answer

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.

Batman117 · Answer

D.
Let initial coffee cost was 100 and 100 customers visited and profit margin per coffee was 10.
Revenue: 100*100
Profit:1000

Now new price is 150 
60% customer reduced means 60 customer.
Revenue:150*60
So revenue decreased
Profit:60*60
Profit increased.

Posted from my mobile device

Batman117 · Answer

D.
Let initial coffee cost was 100 and 100 customers visited and profit margin per coffee was 10.
Revenue: 100*100
Profit:1000

Now new price is 150 
60% customer reduced means 60 customer.
Revenue:150*60
So revenue decreased
Profit:60*60
Profit increased.

Posted from my mobile device

Bunuel · Answer

OFFICIAL EXPLANATION

The only way in which revenues can increase despite a fall in the number of visitors is if the price per item were to be increased. D states this and is the correct answer. This also explains why the number of customers visiting Starbeans has gone down.

(A) Low rates for coffee beans will reduce the cost and increase the profit, but it cannot increase the revenue.

(B) If anything, this fact should have helped increase the number of customers coming to Starbeans.

(C) This still does not explain how sales can increase despite a fall in the number of customers.

(D) The correct answer.

(E) Same as A.

RevantChop · Answer

B. looks like the correct answer to me. Because if he made the seats much more comfortable and changed the interiors, it indicates that customers are spending more time in the cafe and therefore ordering more items, resulting in a revenue increase.

kayarat600 · Answer

This is a very lenient question you can tell by how many people got this right

You are overthinkibg for a single option and ignoring the rest how dors the interior increase revenue and let's assume the interior really means more people stay around hence newer people aren't coming in as much the text says visiting even if my restaurant is full I may have to enter it to notice this. The text says fewer people are coming in general.

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

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