A factory produces two types of components, Type A and Type B. Type A components have a defect rate of 2%, and Type B components have a defect rate of 5%. If 70% of the factory's total output consists of Type A components and 30% consists of Type B components, what is the overall defect rate for all components produced?

The correct answer to the question "A factory produces two types of components, Type A and Type B. Type A components have a defect rate of 2%, and Type B components have a defect rate of 5%. If 70% of the factory's total output consists of Type A components and 30% consists of Type B components, what is the overall defect rate for all components produced?" is Option A: 2.9%.

The other options — B) 3.5%, C) 3.8%, D) 7.0% — are incorrect for this GMAT Exam Prep question. As explained above: Calculate the weighted average: (0.70 * 0.02) + (0.30 * 0.05) = 0.014 + 0.015 = 0.029. This means the overall defect rate is 2.9%.