GRE Prep Club Team Member
Joined: 20 Feb 2017
Posts: 2506
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GPA: 3.39
Re: The prices for all kinds of fish sold in Eastville's downtown Old Mark
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24 Jan 2023, 02:08
Old market vendor:
material cost per unit: M
overhead cost unit: OH1
SP per unit: SP1
Profit per unit P1 = SP1 - (M+OH1)
Total Profit P1 x N1 (N1 is the number of units sold by Old Market)
Uptown vendor:
material cost per unit: M (same as old market vendor)
overhead cost unit: OH2
SP per unit: SP2 (which is >SP1)
Profit per unit P2 = SP2 - (M+OH2)
Total Profit = P2 x N2 (no. of unit ssold by Uptown vendor)
The conclusion has two parts: 1. total profits are same P1 x N1 = P2 x N2, 2. P1<P2 and N1>N2
Any statement that supports one of the above would qualify as a strengthening statement.
Option E: If old market vendors DO NOT have less overhead costs than the upmarket vendors then they have total cost equal to or more than that of upmarket vendors - Since SP1 <SP2, this supports that P1<P2.
Answer: E