medium · GMAT Verbal
A neighborhood bakery sells out of its fresh bread every single morning, yet the owner insists that she actually loses money on the bread and earns her profit elsewhere in the shop.
Which of the following, if true, best explains how the bakery can sell out of bread daily and still lose money on it?
- The bakery deliberately prices its bread below cost to draw in customers, who then buy high-margin pastries and coffee.
- The bakery bakes considerably more bread each day than it is ever able to sell to the steady stream of customers who come through its doors.
- Bread is by a wide margin the single most popular item that the small neighborhood bakery offers to the customers who visit it.
- The bakery's pastries are each priced noticeably higher than its individual loaves of freshly baked bread.
- The owner finds the work of baking fresh bread far more enjoyable than the other tasks her shop requires.
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