Must be TrueDiff: Medium

Logic Breakdown

Passage Summary: A wine company sells its bottles for the same price it did decades ago. While most of their expenses are the same, the price they pay for corks has gone way up.

Reasoning: The wholesale price and most production costs have remained the same since 1991, but the cost of corks has doubled during that same period.

Analysis: This stimulus is essentially a word-based math problem centered on the profit equation: Profit = Price - Cost. We are told the Price is a constant and the 'Cost' variable has increased because one of its components (corks) doubled while the others stayed flat. Mathematically, if you subtract a larger number from the same starting price, the resulting profit must be smaller. You should anticipate an answer that concludes the profit per bottle is lower now than it was in 1991.

Passage Stimulus

Passage Redacted

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10.

If the statements above are true, which one of the following must also be true on the basis of them?

Correct Answer
B
Because the wholesale price is unchanged and only the cork cost rose (all other costs are constant), the profit per bottle must be smaller today than in 1991.
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