**Introduction to Caselets:**

1) The data is usually in the form of a paragraph.

2) It is one of the most difficult to manage since the interpretation of required data in a meaningful manner is left to the student’s ability to comprehend the hidden facts.

## Logical Reasoning Set 8

BILT has 10% market share in paper and sells 1000 pieces for Rs 10 each. It launches a new product to captivate the customer.
The overall market grows by 20% each year for the next 2 years and BILT is able to increase its market by gaining 20% market
share every year for the next 2 years. It raises prices by Rs 5 every year. The cost structure has a fixed and a variable component.
Its fixed costs are Rs 5000 every year. Variable costs are Rs 5 in the first year and this increases by Rs 3 every year. The market
share here refers to the volume, i.e. number of items sold. Revenue = number of items sold * price Profit = Revenue – Total Costs |

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## Questions Set 8

**Q1)**What is the market size in the second year?

**1)**3600

**2)**12000

**3)**1200

**4)**Data Insufficient

**Q2)**What is BILT's revenue in the first year?

**1)**1000

**2)**5000

**3)**7500

**4)**10000

**Q3)**What was BILT's average revenue over the 3 years?

**1)**66000

**2)**66330

**3)**69330

**4)**75000

**Q4)**What is the profit made by the company in the 3rd year?

**1)**26800

**2)**59800

**3)**64800

**4)**46300

**Q5)**What would BILT's selling price in the 3rd year have been, had the profits in the 3rd year the same as the second year's profit?

**1)**15

**2)**20

**3)**14.5

**4)**Data Insufficient

**SOLUTIONS:**

Year | BILT Share | Market Size | Sales | Price | Revenue |
---|---|---|---|---|---|

Year 1 | 0.1 | 10000 | 1000 | 10 | 10000 |

Year 2 | 0.3 | 12000 | 3600 | 15 | 54000 |

Year 3 | 0.5 | 14400 | 7200 | 20 | 144000 |

Year | Revenues | Fixed Cost | Variable Cost | Profit |
---|---|---|---|---|

Year 1 | 10000 | 5000 | 5000 | |

Year 2 | 54000 | 5000 | 28800 | 20200 |

Year 3 | 144000 | 5000 | 79200 | 59800 |

**Q1) Option 2.**

Q2) Option 4.

Q3) Option 3.

Q4) Option 2.

Q5) Option 3.

Q2) Option 4.

Q3) Option 3.

Q4) Option 2.

Q5) Option 3.