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by shikh » Sat Dec 03, 2011 2:06 am
Marisol has a per unit cost of $20. She has fixed costs of $10,000. Sales will fall as the price rises and she has decided to charge either $31 or $40 per unity. In order to maximize her profit, should she charge $31?

(1) At a price of $40, she will sell between 7191 and 8347.

(2) At a price of $31, she will sell between 12,062 and 15,688.
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Source: — Data Sufficiency |
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by pemdas » Sat Dec 03, 2011 12:12 pm
st(1) Not Sufficient, as we don't know about when the price went up and the volume of sales @ $31 per unit to compare with the profit of sales @ $40 per unit;

st(2) the same as in st(1), time price went up is not known, neither sales volumes are known Not Sufficient

Combined st(1&2) sales lower limits @ $40 is 7,191 units and @ $31 is 12,062. By applying the sales prices less the unit cost and the fixed cost we find the units' number required to break-even 10,000/(31-20)=909 and 10,000/(40-20)=500
Compare (7,191-500)*40 and the upper limit (8,347-500)*40 both are less than (12,062-909)*31, Sufficient to answer Yes

c
shikh wrote:Marisol has a per unit cost of $20. She has fixed costs of $10,000. Sales will fall as the price rises and she has decided to charge either $31 or $40 per unity. In order to maximize her profit, should she charge $31?

(1) At a price of $40, she will sell between 7191 and 8347.

(2) At a price of $31, she will sell between 12,062 and 15,688.
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by tpr-becky » Sun Dec 04, 2011 9:41 am
This question asks you to figure out the pieces of the puzzle needed and is not really dependant on the math-

statement 1 - gives sales info about one option, but not the other, therefore you can't tell if you would maximize your profits - BCE are left

Statement 2 - gives you sales info about the other option, but not the first, again impossible to tell if you can maximize.

The two together give you the info about both - if you were in a hurry you could decide they were most likely sufficient. However, to be sure one is always better you want to check - multiply the lowest sales of $40 and the highest sales of $31 by the profits for each - $20(7191) = 143,820 9(15688) = 141,192. Thus you will always make more profit selling at $40, even if you sell the lowest number possible. Sufficient thus C.
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