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28 May 2015, 11:42
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Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
25%
(medium)
Question Stats:
74% (01:23) correct
26%
(01:35)
wrong
based on 249
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When the price of an article was reduced by 20% its sale increased by 80%. What was the net effect on the sale?
(A) 44% increase
(B) 44% decrease
(C) 60% increase
(D) 66% increase
(E) 66% decrease
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(A) 44% increase
(B) 44% decrease
(C) 60% increase
(D) 66% increase
(E) 66% decrease
_________________
Please press kudos if you like my post.
28 May 2015, 12:01
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The question asks "what was the net effect on the sale?" and tells us "the sale increased by 80%". So the answer is 80%. There's a problem with the wording of the question.
The question surely means to ask "what was the effect on the revenue". This is a pure ratio question, so you can just invent numbers if you like - the answer will be the same for any numbers you choose. So you could imagine at first 10 items were sold for $10 each, for $100 revenue. Then after the percent changes, 18 items were sold for $8 each, for $144 revenue, a 44% increase.
Or you can use algebra: if n items are sold for $p each, revenue is $np. If we reduce the price by 20%, the new price is 0.8p. If we increase the number sold by 80%, the new number sold is 1.8n. So the new revenue is (0.8p)(1.8n) = 1.44np, which is 1.44 times the old revenue, so is 44% greater.
The question surely means to ask "what was the effect on the revenue". This is a pure ratio question, so you can just invent numbers if you like - the answer will be the same for any numbers you choose. So you could imagine at first 10 items were sold for $10 each, for $100 revenue. Then after the percent changes, 18 items were sold for $8 each, for $144 revenue, a 44% increase.
Or you can use algebra: if n items are sold for $p each, revenue is $np. If we reduce the price by 20%, the new price is 0.8p. If we increase the number sold by 80%, the new number sold is 1.8n. So the new revenue is (0.8p)(1.8n) = 1.44np, which is 1.44 times the old revenue, so is 44% greater.
