Question

The chart below gives the per unit selling prices and costs, in rupees, of 11 items prepared by a sweetshop. Producer's margin is the gap between the cost and the producer's selling price. Retailer's margin is the gap between the producer's selling price and the retailer's selling price.

Based on the chart, which of the following conclusions can be made?

• A. Producer's margin for panir kachouri is less than the retailer's margin.
• B. Producer's margin for chicken pizza is more than the retailer's margin.
• C. Producer's margin for fish spring roll is more than the retailer's margin.
• D. Producer's and retailer's margins are highest for panir kachouri alone.

Hint:

Compare the two vertical gaps, cost to producer's price, and producer's price to retailer's price, item by item rather than looking at overall height.

Answer 1

The Correct Option is C

This is a chart reading question with three price series for 11 sweetshop products: cost, producer's selling price and retailer's selling price. Instead of comparing raw gaps, think of it as: which of these two, the producer or the retailer, adds more value in rupee terms to each product?

1. Panir kachouri, producer's margin less than retailer's: Checking the chart, the steepest rise for panir kachouri happens between the cost line and the producer's price line, so the producer adds more here. The claim that the producer's margin is smaller is false.
2. Chicken pizza, producer's margin more than retailer's: For chicken pizza the retailer's price line pulls far above the producer's price line while the producer's price stays close to cost, so the retailer, not the producer, earns the bigger cut. This claim is false.
3. Fish spring roll, producer's margin more than retailer's: For fish spring roll the cost line and the producer's price line are far apart, and the producer's price line and retailer's price line sit close together on top. That means the producer captures most of the markup on this item, so this claim checks out.
4. Panir kachouri margins highest overall: Scanning across all 11 items, later items such as fish spring roll and chicken spring roll show gaps at least as large as panir kachouri, so panir kachouri is not the single highest case.

Let's summarize:

• A three line chart like this hides two separate margins: cost to producer, and producer to retailer.
• Always compare the two gaps item by item rather than judging from overall height.

The chart supports only the statement about fish spring roll, so option (C) is correct.