A company decreased the price of its main product by 50%.

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AAPL: Moderator; Posts: 2672; Joined: Sun Oct 29, 2017 2:08 pmFollowed by: 2 members

by AAPL » Fri Aug 16, 2019 8:36 am

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A company decreased the price of its main product by 50%. Subsequently, the number of units sold increased such that the total revenue remained unchanged. What was the ratio of the percent increase in the units sold to the percent decrease of the original price for this product?

A. 0.5
B. 1.0
C. 1.5
D. 2.0
E. 4.0

OA D

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Source: Beat The GMAT — Problem Solving | Fri Aug 16, 2019 8:36 am

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Ian Stewart: GMAT Instructor; Posts: 2623; Joined: Mon Jun 02, 2008 3:17 amFollowed by: 355 members; Location: Montreal; Thanked: 1090 times; GMAT Score:780

by Ian Stewart » Sun Aug 18, 2019 6:01 am

If you cut your prices in half, you'll need to sell twice as many units to make the same revenue. So the number of units sold doubled, or increased by 100%, and we're told the price decreased by 50%. The ratio of 100 to 50 is the same as 2 to 1.

I have no idea why the answer choices are written that way, though - they're not written as ratios, and there's no reason a decimal should appear in the integer answers.

For online GMAT math tutoring, or to buy my higher-level Quant books and problem sets, contact me at ianstewartgmat at gmail.com

ianstewartgmat.com

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deloitte247: Legendary Member; Posts: 2214; Joined: Fri Mar 02, 2018 2:22 pmFollowed by: 5 members

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by deloitte247 » Sun Aug 18, 2019 8:09 am

For the revenue to remain the same when the price is halved, the number of products sold must double.
Therefore, the increase in the number of products sold = 100%
so, we will have the ratio as 100% / 50% = 2

Answer = D

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Scott@TargetTestPrep: GMAT Instructor; Posts: 8177; Joined: Sat Apr 25, 2015 10:56 amFollowed by: 29 members; Location: Los Angeles, CA; Thanked: 43 times

by Scott@TargetTestPrep » Sun Aug 25, 2019 5:33 pm

AAPL wrote:Manhattan Prep

A company decreased the price of its main product by 50%. Subsequently, the number of units sold increased such that the total revenue remained unchanged. What was the ratio of the percent increase in the units sold to the percent decrease of the original price for this product?

A. 0.5
B. 1.0
C. 1.5
D. 2.0
E. 4.0

OA D

Since the company decreased the price of its product by 50% = 1/2, in order to keep the revenue the same, the number of units sold would need to be 2 times what was sold previously, or a 100% increase, which is 1.

Thus, the ratio of the percent increase in units sold to the percent decrease in price is:

(1)/(1/2) = 2

Answer: D

Scott Woodbury-Stewart
Founder and CEO
[email protected]

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