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A company determines its yearly profits by deducting its

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by BTGmoderatorDC » Fri Oct 05, 2018 1:18 am

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A company determines its yearly profits by deducting its operating expenses from its revenue for that year. Company X manufactures only widgets and gadgets. Company X's profits for this year are significantly higher than those for last year, although the company's operating expenses remained the same and the company sold the same number of widgets and gadgets as it did last year.

The statements above, if true, best support which of the following conclusions?

A. Consumers purchased more widgets and gadgets this year than they did last year.
B. Company X has raised the price of its widgets or of its gadgets since last year.
C. Company X's main competitors sold fewer widgets and gadgets this year than they did Company X.
D. Company X introduced a new type of widget this year.
E. Company X spent more on advertising this year than it did last year.

OA B

Source: Manhattan Prep
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Source: — Critical Reasoning |

by nonplus2 » Sat Oct 06, 2018 4:05 am
What can be the reason that Company's profits are higher this year than last year given that sales numbers and operating expenses remain the same.

A. Consumers purchased more widgets and gadgets this year than they did last year. As it is already mentioned that sales numbers remain the same, so units sold are the same. Incorrect.
B. Company X has raised the price of its widgets or of its gadgets since last year. Correct
C. Company X's main competitors sold fewer widgets and gadgets this year than they did Company X. Irrelevant
D. Company X introduced a new type of widget this year. We can't infer that. Incorrect
E. Company X spent more on advertising this year than it did last year. We can't infer that. Incorrect
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