Profit grew while sales fell. The growth must mean the company charged more per unit. Which assumption is required?
AUnit costs did not rise faster than price.
BSales mix stayed constant.
CMarketing budget was unchanged.
DAll buyers paid more.
Answer & Solution
Correct answer: A. Unit costs did not rise faster than price.
1. Profit = (Price − Cost) × Units. 2. If unit cost rose more than price, no real margin gain. 3. (A) is the needed assumption.
_Source: 501-GMAT-Questions Ch 2 Critical Reasoning_
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