In 1984 Exco, which sells its products only through mail-order catalogs, began distributing its catalog to people who had never purchased Exco’s products, while it continued to distribute the catalog to previous customers. Total dollar sales increased in 1984, but Exco’s profits that year were smaller than in 1983.
Which of the following, if true, contributes most to an explanation of Exco’s smaller profits in 1984, as compared to 1983?

Question

Examsnet · Accepted Answer

Correct Answer is :  The increase between 1983 and 1984 in the cost of mailing the catalogs was greater than the increase in sales from 1983 to 1984

GMAT Verbal Reasoning Practice Test 3