Q10 - The wholesale price of one

[slimjimsquinn]

Hi,

What is the difference between answer D) and answer B)? Is it between the profit of each bottle versus the aggregate profit?

What's the significance of that difference?

Thanks!

[ohthatpatrick]

You clearly surmised the inference they were going for: since the price and almost all expenses have remained constant, but one expense went up, profit must have gone down.

(B) expresses this idea about each single bottle of wine. Our information was also about a single bottle of wine. The first sentence tells us that the price of ONE BOTTLE is the same. The final sentence tells us that all of the costs of producing A BOTTLE have remained constant (except corks).

(D) is referring to aggregate profit. That would be calculated by (Profit/Bottle) x (# of Bottles).

We don't have any information about the # of bottles sold, so we have no idea if the winegrower has made more total profit this year or in 1991.

This answer doesn't have to be true because the winegrower might have sold 100 bottles at $2 profit/bottle in 1991 ($200 aggregate profit), but sold 200 bottles at $1.50 profit/bottle this year ($300 aggregate profit).

Hope this helps.

[Mw22390]

A problem I have with the right answer is that it assumes the only profits come from wholesale priced bottles. What if the were non-wholesale priced bottles that didn't have pricing that has remained the same since 1991. The correct answer doesn't say anything about wholesale priced bottles

[ohthatpatrick]

I see where you're going with that, but don't they define for us that "the winegrower's profit is equal to the wholesale price minus the costs of producing the bottled wine"?

You're making it seem like other factors may influence the winegrower's profit, but if they spell out a definition/equation that says

winegrower's profit = Wholesale price - Costs of Producing

then we are totally safe thinking only in terms of Wholesale price, since we are limited by the variables that are in the profit equation given.

Does that make sense?

[janicegyw]

I have problem with this sentence:

twice as much today as they did in 1991.

does it mean:
today:1991=2:1

I have read explanations of this following expression:
consume as much alcohol as other addictive substances.

as

alcohol >= other addictive substances

so, I am confusing that whether I should interpret the first example as:

today:1991 >= 2:1


anyone could help? Thanks!

[WaltGrace1983]

I have problem with this sentence:

twice as much today as they did in 1991.

does it mean:
today:1991=2:1

I have read explanations of this following expression:
consume as much alcohol as other addictive substances.

as

alcohol >= other addictive substances

so, I am confusing that whether I should interpret the first example as:

today:1991 >= 2:1


anyone could help? Thanks!

"...all of the costs to the winegrower of producing a bottle...have remained constant...except that of the corks, which cost nearly twice as much today"

while we cannot really say much because of the "nearly," let's go ahead and assume that "nearly" is gone. To your question, "twice as much today as in 1991" means as you say it does: for example, it costs $2 now and in 1991 it cost $1.

[mjacob0511]

Passage: The wholesale price (WP) of one bottle of VV wine is the same as it was in 1991. The winegrowers profit = WP - production costs, which include the cost of the bottles and corks. All costs remained constant EXCEPT for corks.

Now we already know the the wholesale price stayed the same.

1991: WP 100 - 5 (bottles) - 5 (cork) = 90 (profit)
2014: WP 100 - 5 (bottles) - 9 (cork) = 86 (profit)

We are looking for an answer that reflects this decrease in profits.

(A) We don't care about the number of bottles, just the price.
(B) Perfect. Each bottle brings in a small amount less profit, because the winegrower is making less when he sells it for the same wholesale price.
(C) We don't know if it costs the cork makers more, maybe they are charging the winegrowers but it doesn't reflect a rise in their own costs, they just want to profit more.
(D) Aggregate profit is smaller? They could make less per bottle but sell 10X more bottles.
(E) We have no info on the cost of the cork vs the bottle.