Multiplying the total employees in each town with their respective averages will give each groups total income. To get the average of both towns together, we add these two total incomes and divide by the combined number of employees. Mathemtically it would look like:
Let the number of employees in A = \(a\), and in B = \(b\).
\(\frac{Xa + Yb}{a+b}\)
Imagine that both towns have the same amount of people, ie \(a=b\), plugging that back into the above equation gives:
\(\frac{Xa + Ya}{a+a}\)
\(\frac{a(X+Y)}{2a}\)
\(\frac{X+Y}{2}\) which is exactly what pops up in the question stem. For the new average to be smaller, there need to be more employees in the town with the smaller average income.
(1) There are more employees in Town A than in town BWhile this statement tells us that A has more people than B, without knowing more information about their respective average incomes we cannot solve this question.
INSUFFICIENT(2) Y − X = 4200This statement shows that town B has a greater average income than town A, however, as we do not know any information regarding the number of employees in each town, we cannot solve the question using this statement alone.
INSUFFICIENT(1+2)Putting the two statements together, we know that A has more employees than B, and a lower average income. This means that in terms of the average of the two towns, town A will be weighted more and thus will bring the average down. Meaning that \(\frac{X+Y}{2}>\frac{Xa + Yb}{a+b}\)
SUFFICIENTANSWER C