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WE:Analyst (Investment Banking)
Re: On Monday, Daisy’s Lemonade Stand sold lemonade at 20 cents per cup.
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15 Feb 2021, 08:19
Hi!
This CR question would be easier if we solve it by using numbers.
Let's assume, Daisy's lemonade stall sold 3 glasses of lemonade= 3*20 cent=60 cents
Lemon Shack sold 2 glasses of lemonade= 2*30=60 cents
I choose 3 &2 because we need identical revenues.
Now, Profit=Revenue- cost incurred
And if both of them earned same revenue and profit, then the cost incurred will also be the same. Please note we are not asked the revenue and profit/ cost incurred in %.
The statements above best support which of the following assertions?
(A) On Monday, Daisy’s Lemonade Stand sold fewer cups of lemonade than did the Lemon Shack.- Opposite- OUT
(B) The Lemon Shack sells higher quality lemonade than does Daisy’s Lemonade Stand.- Out of scope- OUT
(C) On Monday, Daisy’s Lemonade Stand and the Lemon Shack incurred identical costs to run their businesses.- Uh huh!!- Correct
(D) In general, lemonade consumers prefer the lemonade at Daisy’s Lemonade Stand to the Lemonade at the Lemon Shack.-Out of scope- OUT
(E) The Lemon Shack would not increase its revenues by lowering its prices.- That's too far- OUT
IMO C
Hope this helps