Architj wrote:In 1985 a company sold a brand of shoes to retailers for a fixed price per pair. In 1986 the number of pairs of the shoes that the company sold to retailers decreased by 20 percent, while the price per pair increased by 20 percent. If the company's revenue from the sale of the shoes in 1986 was $3.0 million, what was the approximate revenue from the sale of the shoes in 1985?
(A) $2.4 million
(B) $2.9 million
(C) $3.0 million
(D) $3.1 million
(E) $3.6 million
To determine the revenue ratio for 1986 to 1985, TEST AN EASY CASE.
1985:
Let the number of pairs sold = 10.
Let the price per pair = 10.
Total revenue = (number of pairs)(price per pair) = 10*10 = 100.
1986:
Since 20% fewer pairs are sold, the number of pairs = 10 - 20% of 10 = 10-2 = 8.
Since the price per pair increases by 20%, the price per pair = 10 + 20% of 10 = 10+2 = 12.
Total revenue = (number of pairs)(price per pair) = 8*12 = 96.
Resulting ratio:
(revenue in 1986)/(revenue in 1985) = 96/100 = 24/25.
Since the actual revenue in 1986 = 3 million, set up the following proportion:
24/25 = 3/x
24x = 75
x = 3.125.
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
