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
An electrical supplies store sells 140 power stabilizer
This topic has expert replies
GMAT/MBA Expert
- Brent@GMATPrepNow
- GMAT Instructor
- Posts: 16207
- Joined: Mon Dec 08, 2008 6:26 pm
- Location: Vancouver, BC
- Thanked: 5254 times
- Followed by:1268 members
- GMAT Score:770
Let x = the selling price per unitAAPL 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
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
- GMATGuruNY
- GMAT Instructor
- Posts: 15539
- Joined: Tue May 25, 2010 12:04 pm
- Location: New York, NY
- Thanked: 13060 times
- Followed by:1906 members
- GMAT Score:790
Since at least $5600 in profit must be earned by 140 units, the minimum required markup per unit = 5600/140 = $40.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
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
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: 7223
- Joined: Sat Apr 25, 2015 10:56 am
- Location: Los Angeles, CA
- Thanked: 43 times
- Followed by:29 members
We use the profit formula: revenue - cost = profit. We can create the following inequality in which n = selling price per unit: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
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