Ask Questions, Discuss Approaches & No Clutter
Jsy Singh
0

The cost of producing radios in Country Q is 10 percent less than the cost

Open 1 Answers 229 Views

The cost of producing radios in Country Q is 10 percent less than the cost of producing radios in Country Y. Even after transportation fees and tariff charges are added, it is still cheaper for a company to import radios from Country Q to Country Y than to produce radios in Country Y. 
The statements above, if true, best support which of the following assertions? 
(A) Labor costs in Country Q are 10 percent below those in Country Y. 
(B) Importing radios from Country Q to Country Y will eliminate 10 percent of the manufacturing jobs in country Y. 
(C) The tariff on a radio imported from Country Q to Country Y is less than 10 percent of the cost of the manufacturing the radio in Country Y. 
(D) The fee for transporting a radio from Country Q to Country Y is more than 10 percent of the cost of manufacturing the radio in Country Q. 
(E) It takes 10 percent less time to manufacture a radio in Country Q than it does in Country Y.

Official Answer

1 Answer

Meenakshi Jain
0
Let us assume that radio manufacturing cost in Country Y is $10. Now because Country Q's manufacturing cost are 10% cheaper, they make radios for $ 9.
I will use to above information to reach to the answer.
( A ) - Out of Scope
( B ) - This cannot be inferred.
( C ) - Correct, this is what the stem is also saying that over all cost is less, which means transporation cost + import cost is less than 10 %
( D ) - If it would have been more than the over all cost would not have been less than 10 % difference. - Doesn't seem correct
( E ) - This also cannot be inferred.
Hence C is the answer.
answered Mar 29, 2015 by Senior Associate (449 points)
Student Speaks

Jyotsna Mehta

Indian School of Business, Co'18

I am very thankful to Gmatxchange and would definitely recommend Gmatxchange mentors to all those students applying for MBA admissions

Your Tentative GMAT Score
Estimate your GMAT score.
700
The scorer helps you to determine your current level within a few questions you solve.Read More
Please log in or register to use the Scoring Feature
Confused about your profile & colleges, Get FREE profile evaluation today from over 10 consultants.
Follow us and get quick prep updates on Facebook
...