GMAT Prep Practice Test Quant Questions #2

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GMAT Prep Practice Test Quant Questions #2

by simpm14 » Mon Apr 01, 2019 3:59 pm
Data Sufficiency

I just took the first GMAC Official Practice Test and am trying to figure out the ones I got wrong.

Warehouse W's revenue from the sale of sofas was what percent greater this year than it was last year?

(1) Warehouse W sold 10 percent more sofas this year than it did last year.
(2) Warehouse W's selling price per sofa was $30 greater this year than it was last year.

The answer is E, why isn't it C?

Thanks!

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by ceilidh.erickson » Thu Apr 04, 2019 10:23 am
We can TEST CASES to prove insufficiency in this problem.

Warehouse W's revenue from the sale of sofas was what percent greater this year than it was last year?

Revenue from sales will equal (price of sofas)(quantity sold) --> R = (p)(q)
To answer the question of the proportional difference in revenue, we need to know:
- what was the proportional difference in price?
- what what the proportional difference in quantity sold?

(1) Warehouse W sold 10 percent more sofas this year than it did last year.
This doesn't tell us anything about price. If we sold 10% more sofas at the same price, we'd make 10% more revenue. But if price also went up 10%, then:
(1.1p)(1.1q) = 1.21pq --> 21% increase in revenue
Insufficient.

(2) Warehouse W's selling price per sofa was $30 greater this year than it was last year.
This doesn't give us any information about how many were sold. We might have sold half as many as last year... or twice as many. Those would give us very different answers about the change in revenue.
Insufficient.

(1) and (2) together
We know the proportional increase in quantity sold, and a numerical difference in price. Let's compare 2 different scenarios:

Scenario A (cheap couches):
last year: sold 100 couches at $100 each --> $10,000 in revenue
this year: sold 110 couches at $130 each --> $14,300 in revenue
43% increase in revenue

Scenario B (very expensive couches):
last year: sold 10,000 couches at $10,000 each --> $100,000,000 in revenue
this year: sold 11,000 couches at $10,030 each --> $110,330,000 in revenue
Barely more than a 10% increase in revenue

Because we don't know what that +$30 means as a PROPORTIONAL difference, we don't know the proportional change to the revenue.

The answer is E.
Ceilidh Erickson
EdM in Mind, Brain, and Education
Harvard Graduate School of Education

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by ceilidh.erickson » Thu Apr 04, 2019 10:42 am
In DS, the GMAT often likes to mix up PROPORTIONS v. REAL NUMBERS. Generally speaking, a real number won't help to answer a proportion question (unless you're give more info).

Here are more in a similar vein to try:
https://www.beatthegmat.com/by-what-per ... tml#790569
https://www.beatthegmat.com/ds-5-t275286.html#717201
https://www.beatthegmat.com/if-the-salt ... tml#807915
https://www.beatthegmat.com/in-the-figu ... tml#825835
https://www.beatthegmat.com/how-to-choo ... tml#695925
Ceilidh Erickson
EdM in Mind, Brain, and Education
Harvard Graduate School of Education