Hi dayugsi,

Most GMAT questions can be solved in a variety of ways, so you should look for alternatives to "math" approaches (in many cases, the math approach takes the longest to set up and complete).

Here, we're essentially asked to spend $120 on towels. We're then asked to figure out the price point at which ADDING $1 to the price of a towel results in 10 FEWER towels purchased. Since the answers are NUMBERS (and almost all consecutive integers), we can TEST THE ANSWERS....

IF....
Towels are....
$1 each, then we can buy 120 towels
$2 each, then we can buy 60 towels
$3 each, then we can buy 40 towels
$4 each, then we can buy 30 towels
$5 each, then we can buy 24 towels

Now, stop and look at the progression. We're looking for a point at which the DIFFERENCE is 10 towels. That only happens in one "spot" - when the price is increased from $3 to $4. The question asks for the current (re: lower) price.

Final Answer: C

GMAT assassins aren't born, they're made,
Rich

A store currently charges the same price for each towel that it sells. If the current price of each towel were to be increased by $1, 10 fewer of the towels could be bought for $120, excluding sales tax. What is the current price of each towel?
(A) $1
(B) $2
(C) $3
(D) $4
(E) $12

Here's an algebraic approach:

Let P = CURRENT price (in dollars)
So, P + 1 = NEW price (in dollars)

At P dollars apiece, the # of towels we can buy = 120/P
At (P+1) dollars apiece, the # of towels we can buy = 120/(P+1)
We're told we can buy 10 fewer towels at the NEW price.
So, (# of towels we can buy at CURRENT price) - (# of towels we can buy at NEW price) = 10
So, we can write: 120/P - 120/(P+1) = 10
SOLVE FOR P
Divide both sides by 10 to get: 12/P - 12/(P + 1) = 1
Multiply both sides by (P)(P+1) to get: 12(P+1) - 12P = P(P + 1)
Expand: 12P + 12 - 12P = P² + P
Rearrange: P² + P - 12 = 0
Factor: (P + 4)(P - 3) = 0
So, P = -4 or P = 3
P cannot be negative (since we can't have a negative price)
So, P must equal 3
Answer: C

Cheers,
Brent