As a result of a new promotion, a company increased its market share

Question

As a result of a new promotion, a company increased its market share of sales of Product X from 6.6% to 8.8%. Assume that the total sales of Product X by all companies were constant. Which of the following is closest to the company's increase in sales of Product X as a result of the promotion?

A) 40%

B) 33%

C) 3O%

D) 25%

E) 22%

A. 40%
B. 33%
C. 30%
D. 25%
E. 22%

KarishmaB · Accepted Answer

*Edited - "The total sales of Product X by all companies were constant" which means the market remained constant at 100 say.

Hence the company increased its share from 6.6 to 8.8 which is an increase of 2.2/6.6 = 33.33%

VivekSri · Answer

We can directly calculate it by = New Market Share - Old Market share/Old Market share = 8.8-6.6/6.6 = 2.2/6.6 = 1/3 * 100 = 33.33

So Option B is the ans

ankitmba95 · Answer

Increase in sales in % = (final share - initial share)/initial share = (8.8-6.6)/6.6=2.2/6.6=0.33 or 33%

Hence B

gmatophobia · Answer

Before Promotion

Total sales of Product X of the company before the promotion =  x_1 
 
 Total sales of Product X of all companies before the promotion =  y 
 
 Market share of Product X of the company =  \frac{x_1}{y} *100= 6.6 ------ (1)

After Promotion

Total sales of Product X of the company after the promotion =  x_2 
 
 Total sales of Product X of all companies after the promotion =  y 
 
 Market share of Product X of the company =  \frac{x_2}{y} *100= 8.8 ------ (2)

From equation (1)

y = \frac{100x_1}{6.6}

From equation (2)

y = \frac{100x_2}{8.8}

Equating both

\frac{x_2}{x_1} = \frac{4}{3}

\frac{4}{3}  is  1.33  , hence the percentage increase = 33%

mandilwar · Answer

I think this is wrong conceptually, you got the answers by chance, had it been some different numbers, answer will be way off.

einstein801 · Answer

Hi  MartyMurray , I'm not getting the english here - "Assume that total sales were constant" - if they were constant how does it translate to an increase in sales of product X? I'd imagine the only reason for market share increasing with constant sales is if the total market size decreased.

MartyMurray · Answer

Let's look at what the passage says.

As a result of a new promotion, a company increased its market share of sales of Product X from 6.6% to 8.8%. Assume that the total sales of Product X by all companies were constant.

- The company increased its market share (percentage of total sales by all companies) from 6.6% to 8.8%.

- Total sales by all companies were constant.

The wording "total sales of Product X by all companies were constant" is not 100% clear, but the only way to read it that makes sense is as meaning that the total OF the sales of all companies remained constant. In other words, industry-wide sales of Product X did not increase or decrease.

After all, "total sales by all companies were constant" must mean "industry-wide total sales remained constant." It could not mean that the total sales of each of all the companies were constant because we already know that the market share of at least one company changed, a change that would not occur if the sales of every individual company in the industry remained constant.

Thus, the meaning is that sales of one particular company went from 6.6% to 8.8% of the same overall total, meaning that sales by other companies must have decreased to have kept total sales the same.

MartyMurray · Answer

As a result of a new promotion, a company increased its market share of sales of Product X from 6.6% to 8.8%. Assume that the total sales of Product X by all companies were constant. Which of the following is closest to the company's increase in sales of Product X as a result of the promotion?

A) 40%

B) 33%

C) 3O%

D) 25%

E) 22%

A quick way to do this question is to set total sales of all companies at 100.

(Note: "Total sales by all companies were constant" must mean "the total sales of Product X by the industry as a whole were constant." It could not mean that the sales of every individual company were constant because we already know that the market share of at least one company changed, a change that would not have occurred if the sales of every individual company in the industry remained constant.)

In that case, the sales of the company in question increased from 6.6% of 100, or 6.6, to 8.8% of 100, or 8.8.

8.8/6.6 = 1.3333...

A. 40%
B. 33%
C. 30%
D. 25%
E. 22%

Correct answer:  B

Felipesilva1997 · Answer

Karisha the question says that the total market remains the same. So you can assume that it gained market share whil an other lost market share. So the correct answer is actually 33%.

As a result of a new promotion, a company increased its market share

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As a result of a new promotion, a company increased its market share

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