# Multi-Source Reasoning Practice Test 2

Directions: Each of our GMAT multi-source reasoning practice tests are based on a series of information contained in text, charts, or tables. For each question you should examine the relevant information and select the best answer of the choices given.

Email 1

Sent from a coffee shop regional manager to the branch manager.

9:14am – We’re considering changing the prices of our lattes to compete with some of the local mom-and-pop stores. The nearby competition charges \$2.50 for their large-size lattes. That is much cheaper than I had thought, and explains why we’ve been losing customers since our current large latte price is \$4.00 without any additional syrups. I believe that if we change our price to \$3.00, we’ll be able to lure back our old customers and prevent any more of our current regulars from leaving.

Email 2

Sent from the branch manager to the regional manager.

2:06pm –  I agree that a price-change may be our best bet to keep our current customers happy. However, \$3.00 is a big decrease, and I’d suggest we drop the price to \$3.75. If we go below \$3.50 we will not be able to remain profitable.

Email 3

Sent from the regional manager to the branch manager.

3:46pm – \$3.75 still puts our coffee more than \$1 over our competitor’s price. However, we offer syrups which the competition does not. If we charge \$3.50 and include one free syrup, we’ll be able to lure customer’s back and stay within profitability.

Consider each of the following statements. Does the information in the three emails support the inference as stated?

Congratulations - you have completed . You scored %%SCORE%% out of %%TOTAL%%. Your performance has been rated as %%RATING%%
 Question 1
If the competition also included a free syrup, then the price of \$3.50 will likely not stop the flow of customers from the coffee chain to the competition.

 A Yes B No
Question 1 Explanation:
The answer is Yes. \$3.50 with a free syrup is still more expensive than \$3.00 with a free syrup.
 Question 2
The regional manager places a higher priority on keeping customers than on profitability.

 A Yes B No
Question 2 Explanation:
The answer is No. The regional manager is concerned with keeping customers, but there is nothing to indicate that it holds more sway than profitability.
 Question 3
It is possible to come up with a new price that is profitable and not more or less than 20% of either the branch manager or the regional manager’s initial new price suggestion.

 A Yes B No
Question 3 Explanation:
The answer is Yes. In order to stay profitable, the price must remain above \$3.50. The initial suggestions for the new price were \$3.00 and \$3.75. 20% on top of \$3.00 is \$3.60. 20% decreased from \$3.75 is \$3.00. As long as the new price is between \$3.50 and \$3.60, it is possible that is can be within 20% of both initial suggestions AND profitable.
 Question 4
The branch manager would be willing to allow more customers to defect to other coffee houses if profitability was not affected.

 A Yes B No
Question 4 Explanation:
The answer is No. While the branch manager is concerned with profitability, there is nothing in the passage to support this kind of inference.
 Question 5
The branch manager will not decrease the price below \$3.50.

 A Yes B No
Question 5 Explanation:
The answer is No. This is too extreme. Although the branch manager is concerned that below \$3.50, the lattes will no longer be profitable, there is nothing to indicate that the branch manager is not open to further negotiation regarding the price.
 Question 6
If the cost per syrup is .50, then the final price will negatively impact the coffee store’s profitability.

 A Yes B No
Question 6 Explanation:
The answer is No. The store’s overall profitability depends on a number of factors including the number of lattes sold and the number of syrups sold. If the store is able to sell more lattes and syrups by lowering the price of the lattes and charging 50 cents per syrup, then the store’s overall profitability could actually improve if they sell some syrups at the 50 cent price while offering the first syrup for free. Additionally, if the store makes even ten cents per latter and is able to sell more lattes by lowering the price, management could improve the store’s overall profitability by charging less per latte. There is no guarantee that any final price agreed upon by both parties will necessarily have a negative impact on the store’s overall profitability based solely on the information in the three e-mails.
 Question 7
The branch manager will personally benefit from keeping the lattes profitable.

 A Yes B No
Question 7 Explanation:
The answer is No. There is nothing in the passage to suggest the branch manager will personally benefit from the profitability of the lattes.
 Question 8
Both the regional manager and the branch manager share common ground.

 A Yes B No
Question 8 Explanation:
The answer is Yes. The passage indicates that both are working towards preventing their customers from leaving.
Once you are finished, click the button below. Any items you have not completed will be marked incorrect.
There are 8 questions to complete.
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