Each customer of a networking company subscribes to one of two plans: Plan A or Plan B.
Each customer of a networking company subscribes to one of two plans: Plan A or Plan B. Plan A costs $75 per month and Plan B costs $175 per month per customer. If the company’s average revenue per customer per month is $150, then what percent of the company's revenue comes from customers with Plan A?
Answer/Solution
30%
Steps/Work
We can show this algebraically:
If there are A customers with plan A, and B customers with plan B, then the total revenue is $75A + $175B.
Since the average customer pays $150, we know that
$150 = ($75A + $175B) / (A + B)
$150(A + B) = ($75A + $175B)
$150A + $150B = $75A + $175B
$75A = $25B
3A = B.
Since there are 1/3 times as many $75 clients as $175 clients, for every $175 received from Plan B customers, 3($75) = $75 is received from Plan A customers, and the percent of revenue from customers with Plan A is:
$75/($75 + $175)= 30%.
The correct answer is choice (B).
If there are A customers with plan A, and B customers with plan B, then the total revenue is $75A + $175B.
Since the average customer pays $150, we know that
$150 = ($75A + $175B) / (A + B)
$150(A + B) = ($75A + $175B)
$150A + $150B = $75A + $175B
$75A = $25B
3A = B.
Since there are 1/3 times as many $75 clients as $175 clients, for every $175 received from Plan B customers, 3($75) = $75 is received from Plan A customers, and the percent of revenue from customers with Plan A is:
$75/($75 + $175)= 30%.
The correct answer is choice (B).