
It is currently Mon Jul 16, 2018 1:01 am

View unanswered posts  View active topics

Page 1 of 1

[ 2 posts ] 

Author 
Message 
questioner

Post subject: GMAT Percentage Posted: Wed Jan 12, 2011 3:13 pm 

Joined: Sun May 30, 2010 3:15 am Posts: 424

Each customer of a networking company subscribes to one of two plans: Plan A or Plan B. Plan A costs $75 per month and Plan B costs $175 per month per customer. If the company’s average revenue per customer per month is $100, then what percent of the company's revenue comes from customers with Plan A?
A. 25% B. 30% C. 37.5% D. 56.25% E. 75%
(D) This is a tricky weighted average problem. If there are only two price levels, $75 and $175, and the average customer pays $100, then the number of customers who pay $75 must be 3 times the number of customers who pay $175, since $100 is 3 times as close to $75 as it is to $175.
We can show this algebraically: If there are A customers with plan A, and B customers with plan B, then the total revenue is $75A + $175B. Since the average customer pays $100, we know that $100 = ($75A + $175B) / (A + B) $100(A + B) = ($75A + $175B) $100A + $100B = $75A + $175B $25A = $75B A = 3B.
Since there are 3 times as many $75 clients as $175 clients, for every $175 received from Plan B customers, 3($75) = $225 is received from Plan A customers, and the percent of revenue from customers with Plan A is: $225/($225 + $175) = $225/$400 = 56.25%.
The correct answer is choice (D).  Could anyone explain this in more detail.... I do not understand why there are 3 times as many $75 clients as $175 clients.


Top 


Gennadiy

Post subject: Re: GMAT Percentage Posted: Wed Jan 12, 2011 3:28 pm 

Joined: Sun May 30, 2010 2:23 am Posts: 498

The algebraic explanation provided above is the most detailed and sufficient. I suggest, you go through it again, line by line:
If there are x customers with plan A, and y customers with plan B, then the total revenue is $75x + $175y. Since the average customer pays $100, we know that $100 = ($75x + $175y) / (x + y) $100(x + y) = ($75x + $175y) $100x + $100y = $75x + $175y $25x = $75y x = 3y.
So there are 3 times as many $75 clients as $175 clients.
If there is some specific line you do not understand  let me know which one.


Top 



Page 1 of 1

[ 2 posts ] 

Who is online 
Users browsing this forum: No registered users and 4 guests 

You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot post attachments in this forum

