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Although sales of luxury goods sharply decreased immediately

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Although sales of luxury goods sharply decreased immediately [#permalink] New post 22 May 2011, 03:27
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42% (02:44) correct 58% (01:24) wrong based on 64 sessions
Although sales of luxury goods sharply decreased immediately following the stock market crash, sales of such goods have since doubled. If the market for luxury goods is to return to its original pre-recession state, retailers must offer significant discounts on
luxury goods for recession-wary consumers. If the statements above are true, which of the following can be inferred?
A. The increase in luxury purchases can most likely be attributed to recent improvements in the state of the economy.
B. After the stock market crash, consumers were afraid to make major purchases, especially of luxury goods.
C. Retailers of luxury goods are currently offering no discounts on their products.
D. The stock market crash resulted in an over 50 percent decrease in sales of luxury goods.
E. The economy would be more stable if all retailers offered additional discounts on their products during economic recessions.
[Reveal] Spoiler: OA
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Re: controversial C.R. from 800 score tests [#permalink] New post 22 May 2011, 03:36
rojans wrote:
Although sales of luxury goods sharply decreased immediately following the stock market crash, sales of such goods have since doubled. If the market for luxury goods is to return to its original pre-recession state, retailers must offer significant discounts on
luxury goods for recession-wary consumers. If the statements above are true, which of the following can be inferred?
A. The increase in luxury purchases can most likely be attributed to recent improvements in the state of the economy. Not concerned with the increase
B. After the stock market crash, consumers were afraid to make major purchases, especially of luxury goods. I kept it on hold ...
C. Retailers of luxury goods are currently offering no discounts on their products. out of scope
D. The stock market crash resulted in an over 50 percent decrease in sales of luxury goods. perfect answer. Suppose the pre crash sales of Luxury goods was 100, it decreased more than 50% so its now 40. but now it has doubled --- so its 80 ,still less than 100( pre cash sales) perfectly answers why discounts must be given
E. The economy would be more stable if all retailers offered additional discounts on their products during economic recessions. out of scope
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Re: controversial C.R. from 800 score tests [#permalink] New post 23 May 2011, 21:21
Hmm...Very good question. I took 4.22 minutes to complete this and got the answer right :)

My reasoning is as follows:

Fact 1: Sales of Luxury Goods decreased immediately after the stock market crash

Fact 2: Sales of Luxury Goods doubled since the immediate decrease

Fact 3: To return to pre-recession rate, retailers must offer significant discounts on Luxury Goods for recession-wary consumers.


In "Fact 2", the author mentions that the sales of Luxury Goods have since doubled. He means, the sales have doubled from the "time immediately after the stock-market crash". The author is not comparing the sales with pre-market-crash period.

Option (A) : No relevance
Option (B) : Even though, this option looks like an answer, it doesn't talk about sales at all
Option (C) : No relevance
Option (D) : This option rightly answers our concerns about Fact 1, Fact 2 and Fact 3
Option (E) : This option states a generic statement which cannot be strongly inferred from the argument above.

So, the correct answer is Option (D)
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Re: controversial C.R. from 800 score tests [#permalink] New post 24 May 2011, 03:31
consumer sales = x
after recession = 0.5x

doubling post recession 0.5x *2 = x
but it has not reached pre recession value.
Hence, k*x *2 = x where k <0.5

D is clear here.
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Re: controversial C.R. from 800 score tests [#permalink] New post 24 May 2011, 11:03
Is it D?
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Re: controversial C.R. from 800 score tests [#permalink] New post 24 May 2011, 11:04
Sorry spoiler isnt displayed can someone confirm if D is the answer ?
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Re: controversial C.R. from 800 score tests [#permalink] New post 24 May 2011, 11:40
Awesome question.

"If the market for luxury goods is to return to its original pre-recession state, retailers must offer significant discounts on luxury goods for recession-wary consumers."
=> there is still a gap, which could be filled by giving the discounts.
Even after doubling the sales, the sales have not reached the initial level => the sales actually decreased more than 50% post market crash.

But What is wrong with B?
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Re: controversial C.R. from 800 score tests [#permalink] New post 01 Jun 2011, 08:51
+1 D

Let's suppose that the sales of luxury goods before recession is 100.
The argument mentions that although the sales after the stock market crash has doubled, the sales has not reached the amount before that crash (100).

In this sense, the sales inmediately after tha crash must has decreased in a 51% or more. If they have decreased in 50% or less, the current sales must be 100 again. Let me illustrate it:

Before the crash: 100
Inmediately after the crash: 50
Recovery: 50 x 2 = 100 again.

D is the winner.
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Re: controversial C.R. from 800 score tests [#permalink] New post 01 Jun 2011, 21:27
Nice ques.. Fell for B ...
After reading explanation D seems to a good ans too ..
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Re: Although sales of luxury goods sharply decreased immediately [#permalink] New post 06 Jul 2014, 22:54
Hello from the GMAT Club VerbalBot!

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Re: Although sales of luxury goods sharply decreased immediately   [#permalink] 06 Jul 2014, 22:54
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