medium · GMAT Verbal
Last quarter, a coffee chain raised the price of every drink by 15%, and the number of drinks it sold barely changed. Yet the chain's total profit from drinks rose only slightly.
Which of the following, if true, best explains why profit rose only slightly despite the price increase and steady sales volume?
- Over the same quarter, the price the chain paid for coffee beans and milk increased sharply.
- The chain opened several new locations during the quarter.
- Customers bought slightly fewer pastries alongside their drinks.
- A competing coffee chain lowered its prices during the quarter.
- The chain reduced its spending on advertising during the quarter.
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