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Lemonade!, Lemonade!

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Lemonade!, Lemonade!

by alex.gellatly » Wed Jun 20, 2012 11:16 pm
On Monday, Daisy's Lemonade Stand sold lemonade at 20 cents per cup. The Lemon Shack sold lemonade at 30 cents per cup. At the end of the day, Daisy's Lemonade Stand and the Lemon Shack reported identical revenues and identical profits.

The statements above best support which of the following assertions?


On Monday, Daisy's Lemonade Stand sold fewer cups of lemonade than did the Lemon Shack.

The Lemon Shack sells higher quality lemonade than does Daisy's Lemonade Stand.

On Monday, Daisy's Lemonade Stand and the Lemon Shack incurred identical costs to run their businesses.

In general, lemonade consumers prefer the lemonade at Daisy's Lemonade Stand to the Lemonade at the Lemon Shack.

The Lemon Shack would not increase its revenues by lowering its prices.
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by sandeep_thaparianz » Thu Jun 21, 2012 1:23 am
Oa is C
Conclusion tells use sale of Daisy's lemonade to shack lemonade = 3:2( since rate are in 2:3 and both had same revenue) and that they have same operating cost( revenue-profit)

On Monday, Daisy's Lemonade Stand sold fewer cups of lemonade than did the Lemon Shack...wrong

The Lemon Shack sells higher quality lemonade than does Daisy's Lemonade Stand....Irrelevant

On Monday, Daisy's Lemonade Stand and the Lemon Shack incurred identical costs to run their businesses..... correct

In general, lemonade consumers prefer the lemonade at Daisy's Lemonade Stand to the Lemonade at the Lemon Shack....irrelevant

The Lemon Shack would not increase its revenues by lowering its prices...wrong
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by Bill@VeritasPrep » Thu Jun 21, 2012 10:01 am
Since we know the sale price for both stands, the fact that revenue was equal means that Daisy must have sold more cups to make up for the lower selling price. We also know that profit was equal for both stands. Since revenue - cost = profit, and we know that revenue and profit are equal, cost must be equal as well.

A--the opposite of what we know to be true.

B--we can't really judge quality from what we know.

C--correct

D--not necessarily; maybe they simply prefer the lower price.

E--we have no way of knowing this.
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by Gaurav 2013-fall » Mon Jun 25, 2012 7:09 am
IMO C.

more of a quant types!!
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