If xerox paper costs 5 cents a sheet and a buyer. . .

Hi Vincen,

To start, the GMAT almost always lists the answer choices 'in order' (often from least to greatest although sometimes in decreasing order). You can sometimes take strategic advantage of that information, so it's important to make sure that you're using practice questions that follow that design pattern. That all having been said, to answer this question, we need to break the calculation down in to 'pieces' (based on the cost/discount of each piece):

The cost of the first 2,000 sheets
The cost of the next 8,000 sheets
The cost of the final 15,000 sheets

At $0.05 per sheet, the first 2,000 sheets would cost (2,000)($0.05) = $100

Since a 10% discount is applied to the TOTAL cost of the next 8,000 sheets, that cost would be....
(8,000)($0.05) = $400 - (.1)($400) = $360

A 20% discount is applied to the TOTAL cost of the final 15,000 sheets....
(15,000)($0.05) = $750 - (.2)($750) = $600

Total Cost = $100 + $360 + $600 = $1060

Final Answer: B

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