Question

A car rental agency lowers its rates by 15%. If the agency wants to recoup the income lost by lowering the prices and have total revenues be at least as high as before, it needs sales to __________ by at least __________.
a. increase; 5%
b. increase; 10%
c. increase; 20%
d. decrease; 10%
a meal from a fast-food restaurant located in a shopping mall food court
the water from your local utility, for which you get a bill every month

Answer 1

The agency need it sales increase by 20 percent if its wants to recoup the income lost by lowering the prices.

Who are the car rental agency?

In practice, these agency operate by purchasing number of fleet vehicles and renting them to customers for a charge which are influenced by car type, number of days, usage type etc.

Hence, since the agency wants to recoup the income lost by lowering the prices and have total revenues be at least as high as before, them they needs its sale level to increase by at least 20%.

Therefore, the Option B is correct.

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