An electrical supplies store sells 140 power stabilizer

Expert replies

Previous Topic Next Topic

AAPL: Moderator; Posts: 2749; Joined: Sun Oct 29, 2017 2:08 pmFollowed by: 2 members

by AAPL » Fri Feb 08, 2019 5:07 am

Timer

00:00

Your answer

Difficulty–

right wrong

Pick an answer to see how members did

Economist GMAT

An electrical supplies store sells 140 power stabilizers every week. If each power stabilizer costs the store $16, what is the minimum selling price per unit that will ensure a weekly profit of at least $5600 from sales of power stabilizers?

A. 24
B. 26
C. 40
D. 56
E. 60

The OA is D

Source: Beat The GMAT — Problem Solving | Fri Feb 08, 2019 5:07 am

GMAT/MBA Expert

Brent@GMATPrepNow: GMAT Instructor; Posts: 16206; Joined: Mon Dec 08, 2008 6:26 pmFollowed by: 1268 members; Location: Vancouver, BC; Thanked: 5254 times; GMAT Score:770

by Brent@GMATPrepNow » Fri Feb 08, 2019 6:14 am

AAPL wrote:Economist GMAT

An electrical supplies store sells 140 power stabilizers every week. If each power stabilizer costs the store $16, what is the minimum selling price per unit that will ensure a weekly profit of at least $5600 from sales of power stabilizers?

A. 24
B. 26
C. 40
D. 56
E. 60

The OA is D

Let x = the selling price per unit
So, x - 16 = the PROFIT on ONE unit
And 140(x - 16) = the PROFIT on the sale of 140 units (aka the weekly profit)

What is the minimum selling price per unit that will ensure a weekly profit of at least $5600 from sales of power stabilizers?
In other words, we want: weekly profit ≥ 5600
Or we can write: 140(x - 16) ≥ 5600
Divide both sides by 140 to get: x - 16 ≥ 40
Add 16 to both sides to get: x ≥ 56

So, the selling price per unit must be $56 or greater

Answer: D

Cheers,
Brent

Brent Hanneson - Creator of GMATPrepNow.com

GMATGuruNY: GMAT Instructor; Posts: 15539; Joined: Tue May 25, 2010 12:04 pmFollowed by: 1906 members; Location: New York, NY; Thanked: 13060 times; GMAT Score:790

by GMATGuruNY » Fri Feb 08, 2019 7:40 am

AAPL wrote:Economist GMAT

An electrical supplies store sells 140 power stabilizers every week. If each power stabilizer costs the store $16, what is the minimum selling price per unit that will ensure a weekly profit of at least $5600 from sales of power stabilizers?

A. 24
B. 26
C. 40
D. 56
E. 60

Since at least $5600 in profit must be earned by 140 units, the minimum required markup per unit = 5600/140 = $40.
Thus, the minimum selling price = (cost per unit) + (minimum required markup per unit) = 16+40 = 56.

The correct answer is D.

Private tutor exclusively for the GMAT and GRE, with over 20 years of experience.
Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.

As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.

For more information, please email me (Mitch Hunt) at [email protected].
Student Review #1
Student Review #2
Student Review #3

GMAT/MBA Expert

Scott@TargetTestPrep: GMAT Instructor; Posts: 8246; Joined: Sat Apr 25, 2015 10:56 amFollowed by: 29 members; Location: Los Angeles, CA; Thanked: 43 times

by Scott@TargetTestPrep » Wed Feb 13, 2019 6:35 pm

AAPL wrote:Economist GMAT

An electrical supplies store sells 140 power stabilizers every week. If each power stabilizer costs the store $16, what is the minimum selling price per unit that will ensure a weekly profit of at least $5600 from sales of power stabilizers?

A. 24
B. 26
C. 40
D. 56
E. 60

The OA is D

We use the profit formula: revenue - cost = profit. We can create the following inequality in which n = selling price per unit:

140n - 140 x 16 ≥ 5600

140(n - 16) ≥ 5600

n - 16 ≥ 40

n ≥ 56

Alternate Solution:

Since the store sells 140 power stabilizer each week, in order to make a profit of $5600, the store must make a profit of at least 5600/140 = $40 on each power stabilizer. Since the cost of a power stabilizer is $16, the selling price of each power stabilizer must be at least 16 + 40 = $56.

Answer: D

Scott Woodbury-Stewart
Founder and CEO
[email protected]

See why Target Test Prep is rated 5 out of 5 stars on BEAT the GMAT. Read our reviews

Featured schoolRound 2 closes Jan 7, 2027 53 days left

Chicago Booth

Since 1982, 10 Booth faculty members have received the Nobel Prize in Economic Sciences, more than any other business school.

#3
U.S. News rank: $175,000
Median base salary: 670
Average GMAT Focus: 635
Students in the class

Apply to Booth Visit chicagobooth.edu See the full profile

Photo: Warren LeMay, CC BY-SA 2.0

GMAT Course Reviews

563 reviews

1168 reviews

431 reviews

359 reviews

147 reviews

5/5

5 Star (563 Reviews)

"Target Test Prep is the closest to the official version of the GMAT exam, about 99% accuracy in terms of the quality and quantity of information. The course has excellently created singular sets of focused lessons and tests for every possible topic that one could come across in the official GMAT exam."

"The TTP course maximizes the efficiency of the time you spend studying. It will take time and effort but I could almost guarantee that if you complete the course exactly as it is laid out you will get an amazing score. They also have a very responsive team willing to help with any questions you might have."

"TTP has two things that I think no other test prep company offers: A teaching approach that reinforces understanding and an attitude that will give you the mental preparedness needed to succeed on the test. TTP gives you a deep understanding of the concept you need to know while teaching you how to think."

Write a Review