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If a merchant purchased a sofa from a manufacturer for $400

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If a merchant purchased a sofa from a manufacturer for $400

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If a merchant purchased a sofa from a manufacturer for $400 and then sold it, what was the selling price of the sofa?

(1) The selling price of the sofa was greater than 140 percent of the purchase price.
(2) The merchant's gross profit from the purchase and sale of the sofa was 1/3 of the selling price.

B

Source: Official Guide 2020

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Hi All,

We're told that a merchant purchased a sofa from a manufacturer for $400 and then sold it. We're asked for the selling price of the sofa. This question is based around a mix of basic Arithmetic and Algebra.

(1) The selling price of the sofa was greater than 140 percent of the purchase price.

Fact 1 tells us that the selling price was GREATER than 140% of $400, so there's clearly a limitless number of possibilities. There's no way to determine the exact selling price, although we know that it would be MORE than (1.4)($400) = $560.
Fact 1 is INSUFFICIENT

(2) The merchant's gross profit from the purchase and sale of the sofa was 1/3 of the selling price.

Based on the information in Fact 2, we can create the following equation:
Profit = (Selling Price) - (Cost)
(1/3)(P) = (P) - 400

This is one variable and one equation, so you CAN solve for P (and there will be just one answer. If you did the extra steps, you would come up with the following:

P = 3P - 1200
1200 = 2P
600 = P
Fact 2 is SUFFICIENT

Final Answer: B

GMAT assassins aren't born, they're made,
Rich

_________________
Contact Rich at Rich.C@empowergmat.com

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