Data Sufficiency - Profitability of Products
CAT 1991 Slot 1 · Quantitative Ability · Medium · Data Sufficiency
This is a medium Quantitative Ability question from the CAT 1991 Slot 1 paper. It tests Data Sufficiency. The full answer key and a step-by-step explanation are below — try it yourself first, then reveal the solution.
Is it more profitable for Company M to produce Q?
I. Product R is sold at a price four times that of Q. II. One unit of Q requires 2 units of labour, while one unit of R requires 5 units of labour. There is no other constraint on production.
- A.
If the question can be answered with the help of statement I alone
- B.
If the question can be answered with the help of statement II alone
- C.
If both statement I and statement II are needed to answer the question
- D.
If the question cannot be answered even with the help of both statements
C
Explanation
Statement I gives the selling price ratio (). Statement II gives the labor constraint ratio. With 10 units of labor, company M can produce 5 units of Q or 2 units of R. Revenue from Q = , Revenue from R = . Thus, R generates more revenue per unit labor. Both statements together are required to answer.
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