Profit-loss problem

[Joy Shaha]

Q. Abir has a wheat business . he purchases wheat from a local wholesaler at a particular cost per pound . The price of wheat at his store $ 3 per pound. His faulty spring balance reads .9 pounds for a pound. Also in the festival season, he gives a 10% discount on the wheat .He found that he made neither a profit or loss in the festive season . At what price the wheat from wholesaler ?
A.2.43;
B.2.5;
C.2.7;
D.3;
E.3.3

[DavidG@VeritasPrep]

Q. Abir has a wheat business . he purchases wheat from a local wholesaler at a particular cost per pound . The price of wheat at his store $ 3 per pound. His faulty spring balance reads .9 pounds for a pound. Also in the festival season, he gives a 10% discount on the wheat .He found that he made neither a profit or loss in the festive season . At what price the wheat from wholesaler ?
A.2.43;
B.2.5;
C.2.7;
D.3;
E.3.3

If the wheat is typically $3/pound, a 10% discount would mean that the wheat sold for $.30 less than $3, or 2.70/pound. And if the scale incorrectly shows that 1 pound is .9 pounds, then the store will receive .9 * 2.70 = 2.43/pound. If Abir broke even, then he must have paid the same price. The answer is A

[Matt@VeritasPrep]

The prompt is unclear in many ways, but one crucial assumption that it forces us to make to solve the problem is that Abir sold all the wheat that he bought. (If he didn't, we could get many solutions.)

Making that assumption, though, we can say

Cost per pound = Revenue per pound

Let's say cost = c. We're told revenue = $3 * .9 * .9, so we've got

c = 3 * .9 * .9

c = 2.43

and we're done! (... and after decoding the prompt, I feel competent to run a wheat business )

[Jay@ManhattanReview]

Q. Abir has a wheat business . he purchases wheat from a local wholesaler at a particular cost per pound . The price of wheat at his store $ 3 per pound. His faulty spring balance reads .9 pounds for a pound. Also in the festival season, he gives a 10% discount on the wheat .He found that he made neither a profit or loss in the festive season . At what price the wheat from wholesaler ?
A.2.43;
B.2.5;
C.2.7;
D.3;
E.3.3

While I doubt that the source of the question is genuine, I could get what the prompt wants to say.

Marked price of wheat per lbs = $3, so selling price = 3 - 10% of 3 = $2.70 per lbs

By way of faulty spring balance, Abir earns 10% on selling price (the balance weighs 0.90 lbs for 1 lbs).

Since he earns no profit and no loss, wholesale price = Selling price - 10% of Selling price = 2.70 - 10% of 2.70 = 2.70 - 0.27 = $2.43.

Answer: A

Hope this helps!

-Jay
_________________
Manhattan Review GMAT Prep

Locations: New York | Paris | Shanghai | Munich | and many more...

Schedule your free consultation with an experienced GMAT Prep Advisor! Click here.