📊 GMAT Exam Prep

Source 1: A report from a market research firm states that consumer preference for eco-friendly products has increased by 30% over the last five years, with 60% of consumers now willing to pay a premium for sustainable goods. Source 2: A manufacturing company, 'GreenTech Inc.,' has just announced a new product line. Their CEO claims these products are 100% recyclable but require a 15% higher production cost, which will translate to a 10% higher retail price compared to their conventional products. Based on the information above, which of the following is most likely true regarding GreenTech Inc.'s new product line?

A GreenTech Inc.'s new product line is unlikely to succeed due to higher pricing.
B GreenTech Inc. will likely see increased sales volume for its eco-friendly products.
C The new product line will achieve higher profit margins despite increased production costs.
D GreenTech Inc. is targeting a niche market, as most consumers are not willing to pay a premium.

✓ Correct Answer: Option B

Source 1 indicates 60% of consumers are willing to pay a premium for sustainable goods. GreenTech's new products are eco-friendly and priced 10% higher. This aligns with consumer willingness to pay more, suggesting increased sales volume is likely.

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