## Question 1: How big is the market for books in China?

### Helpful hints:

- Write out and explain your assumptions verbally before diving into calculations
- Walk your interviewer through the logic and calculations

** Reveal Answer **

**A possible approach to the problem:**

Start with the total population of the United States and estimate the subset that would buy this consultant’s book on “Business in China.”

**Estimated total population in the United States: 300 million**

Of the total population, assume that only people ages 20-60 are interested in academic books.

**Estimated population interested in academic books: 300 million x 40% = 120 million
**

Of those interested in academic books, assume that 20% are interested in business-related books.
*(A reasonable rationale for the 20% assumption is to draw on personal experience by examining how many students on campus are pursuing business-related majors).*

**Estimated population interested in business books: 120 million x 20% = 24 million**

Of those interested in business books, assume that 5% are interested in books on China.
*(A reasonable rationale is to consider that there are many different topics in business, but China is a relatively big topic right now. This assumption does not have the strongest logic and is subject to questioning from the interviewer. Depending on the interviewer’s intentions, 1-15% is a reasonable assumption, but 50% is most likely not). *

**Estimated population interested in business books on China: 24 million x 5% = 1.2 million**

*Is this the final answer?* As a gut check, ask yourself: do you think the consultant can sell over a million copies of his book? Most likely not.

An additional assumption to include could be that of those interested in books on China, only 10% will actually buy his book.
*(A reasonable rationale is to think about how many books you are interested in and how many you actually buy). *

**Estimated population interested in buying his business book on China: 1.2 million x 10% = 120,000**

The final answer to our first question is 120,000 people will buy the consultant’s book “Business in China.”