CAT 2018 Question Paper (Slot 2) - LRDI Question 29

Instructions

There are only four brands of entry level smartphones called Azra, Bysi, Cxqi, and Dipq in a country.
Details about their market share, unit selling price, and profitability (defined as the profit as a percentage of the revenue) for the year 2016 are given in the table below:

In 2017, sales volume of entry level smartphones grew by 40% as compared to that in 2016. Cxqi offered a 40% discount on its unit selling price in 2017, which resulted in a 15% increase in its market share. Each of the other three brands lost 5% market share. However, the profitability of Cxqi came down to half of its value in 2016. The unit selling prices of the other three brands and their profitability values remained the same in 2017 as they were in 2016.

Question 29

The brand that had the highest revenue in 2016 is:

Solution

Let '100x' be the number of smartphones sold in year 2016.

Total revenue generated by Azra = 40x*15000 = Rs. 600000x

Total revenue generated by Bysi = 25x*20000 = Rs. 500000x

Total revenue generated by Cxqi = 15x*30000 = Rs. 450000x

Total revenue generated by Dipq = 20x*25000 = Rs. 500000x

We can see that revenue generated by Azra is the highest among all four brands. Hence, option C is the correct answer.