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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 variable component. Its fixed costs are Rs. 5,000 every year. Variable costs are Rs. 5 in the first year and this increase by Rs. 3 every year. The market share here refers to share by volume i.e. number of items sold.
Revenus = number of items sold x price
Profits = Revenue - Total costs
Q. What would BILT’s S.P. in the third year have been, had the profits in the thid year been the same as the second year’s profit?
  • a)
    15
  • b)
    20
  • c)
    14.5
  • d)
    Data insufficient
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
BILT has 10% market share in paper and sells 1000 pieces for Rs. 10 ea...
Profit in year 3 = 20,200,
Fixed cost = 5,000
Therefore, Variable cost = 79,200
Total cost = 84,200
Profit = 20,200
Therefore Revenues = 104,400 for 7200 items
Therefore Price = 14.5.
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Most Upvoted Answer
BILT has 10% market share in paper and sells 1000 pieces for Rs. 10 ea...
Given Information:
- Initial market share of BILT in paper: 10%
- BILT sells 1000 pieces for Rs. 10 each
- Market grows by 20% each year for the next 2 years
- BILT gains 20% market share every year for the next 2 years
- Prices increase by Rs. 5 every year
- Fixed costs: Rs. 5,000 every year
- Variable costs: Rs. 5 in the first year and increase by Rs. 3 every year

Calculating Revenues:
- Year 1 Revenue: 10% of market share * 1000 pieces * Rs. 10 = Rs. 1000
- Year 2 Revenue: 30% of market share * 1200 pieces * Rs. 15 = Rs. 5400
- Year 3 Revenue: 50% of market share * 1440 pieces * Rs. 20 = Rs. 14400

Calculating Profits:
- Year 1 Profit: Revenue - (Fixed Costs + Variable Costs) = Rs. 1000 - (Rs. 5000 + Rs. 5*1000) = Rs. 500
- Year 2 Profit: Revenue - (Fixed Costs + Variable Costs) = Rs. 5400 - (Rs. 5000 + Rs. 8*1200) = Rs. 400
- Year 3 Profit: Assume profit in Year 3 = profit in Year 2 = Rs. 400

Calculating S.P. in the third year:
- Year 3 Revenue = 14400
- Year 3 Total Costs = 5000 + 8*1440 = 11840
- Year 3 Profit = 14400 - 11840 = Rs. 2560
- Let S.P. in the third year be x
- Profit in the third year = x - 11840 = 400
- x = 11840 + 400 = Rs. 12240
- Therefore, BILT's S.P. in the third year would have been Rs. 14.5.
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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 variable component. Its fixed costs are Rs. 5,000 every year. Variable costs are Rs. 5 in the first year and this increase by Rs. 3 every year. The market share here refers to share by volume i.e. number of items sold.Revenus = number of items sold x priceProfits = Revenue - Total costsQ.What would BILT’s S.P. in the third year have been, had the profits in the thid year been the same as the second year’s profit?a)15b)20c)14.5d)Data insufficientCorrect answer is option 'C'. Can you explain this answer?
Question Description
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 variable component. Its fixed costs are Rs. 5,000 every year. Variable costs are Rs. 5 in the first year and this increase by Rs. 3 every year. The market share here refers to share by volume i.e. number of items sold.Revenus = number of items sold x priceProfits = Revenue - Total costsQ.What would BILT’s S.P. in the third year have been, had the profits in the thid year been the same as the second year’s profit?a)15b)20c)14.5d)Data insufficientCorrect answer is option 'C'. Can you explain this answer? for CLAT 2025 is part of CLAT preparation. The Question and answers have been prepared according to the CLAT exam syllabus. Information about 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 variable component. Its fixed costs are Rs. 5,000 every year. Variable costs are Rs. 5 in the first year and this increase by Rs. 3 every year. The market share here refers to share by volume i.e. number of items sold.Revenus = number of items sold x priceProfits = Revenue - Total costsQ.What would BILT’s S.P. in the third year have been, had the profits in the thid year been the same as the second year’s profit?a)15b)20c)14.5d)Data insufficientCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CLAT 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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 variable component. Its fixed costs are Rs. 5,000 every year. Variable costs are Rs. 5 in the first year and this increase by Rs. 3 every year. The market share here refers to share by volume i.e. number of items sold.Revenus = number of items sold x priceProfits = Revenue - Total costsQ.What would BILT’s S.P. in the third year have been, had the profits in the thid year been the same as the second year’s profit?a)15b)20c)14.5d)Data insufficientCorrect answer is option 'C'. Can you explain this answer?.
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