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Complaints that milk bottlers take enormous markups on the

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Complaints that milk bottlers take enormous markups on the [#permalink] New post 02 Apr 2006, 11:48
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D
E

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Complaints that milk bottlers take enormous markups on the bottled milk sold to consumers are most likely to arise when least warranted by the actual spread between the price that bottlers pay for raw milk and the price at which they sell bottled milk. The complaints occur when the bottled-milk price rises, yet these price increases most often merely reflect the rising price of the raw milk that bottlers buy from dairy farmers. When the raw-milk price is rising, the bottlers’ markups are actually smallest proportionate to the retail price. When the raw-milk price is falling, however, the markups are greatest.

If all of the statements above are true, which one of the following must also be true on the basis of them?

(A) Consumers pay more for bottled milk when raw-milk prices are falling than when these prices are rising.
(B) Increases in dairy farmers’ cost of producing milk are generally not passed on to consumers.
(C) Milk bottlers take substantially greater markups on bottled milk when its price is low for an extended period than when it is high for an extended period.
(D) Milk bottlers generally do not respond to a decrease in raw-milk prices by straightaway proportionately lowering the price of the bottled milk they sell.
(E) Consumers tend to complain more about the price they pay for bottled milk when dairy farmers are earning their smallest profits.
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 [#permalink] New post 02 Apr 2006, 12:09
Now this one is tougth :)

I choose D
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 [#permalink] New post 03 Apr 2006, 02:22
(A) Consumers pay more for bottled milk when raw-milk prices are falling than when these prices are rising. - Consumers pay pretty much same both times.
(B) Increases in dairy farmers’ cost of producing milk are generally not passed on to consumers. - Bit of an extreme statement. Can go beyong scope of this passage.
(C) Milk bottlers take substantially greater markups on bottled milk when its price is low for an extended period than when it is high for an extended period. - Passage does not talk about extended periods.
(D) Milk bottlers generally do not respond to a decrease in raw-milk prices by straightaway proportionately lowering the price of the bottled milk they sell. _ think is better of the lot .
(E) Consumers tend to complain more about the price they pay for bottled milk when dairy farmers are earning their smallest profits.- Nobody is complaining in this passage.

Ans = D
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 [#permalink] New post 03 Apr 2006, 04:25
Hmm....think it should be A
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 [#permalink] New post 03 Apr 2006, 05:03
D it is.

(A) Consumers pay more for bottled milk when raw-milk prices are falling than when these prices are rising.

This states that the bottlers are making maximum profits when the raw-milk prices are down. But it does not say anything about the price the consumer pays.
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 [#permalink] New post 03 Apr 2006, 08:02
IMO D.
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Re: CR: Milk [#permalink] New post 03 Apr 2006, 10:29
Professor wrote:
Complaints that milk bottlers take enormous markups on the bottled milk sold to consumers are most likely to arise when least warranted by the actual spread between the price that bottlers pay for raw milk and the price at which they sell bottled milk. The complaints occur when the bottled-milk price rises, yet these price increases most often merely reflect the rising price of the raw milk that bottlers buy from dairy farmers. When the raw-milk price is rising, the bottlers’ markups are actually smallest proportionate to the retail price. When the raw-milk price is falling, however, the markups are greatest.

If all of the statements above are true, which one of the following must also be true on the basis of them?

(A) Consumers pay more for bottled milk when raw-milk prices are falling than when these prices are rising.
(B) Increases in dairy farmers’ cost of producing milk are generally not passed on to consumers.
(C) Milk bottlers take substantially greater markups on bottled milk when its price is low for an extended period than when it is high for an extended period.
(D) Milk bottlers generally do not respond to a decrease in raw-milk prices by straightaway proportionately lowering the price of the bottled milk they sell.
(E) Consumers tend to complain more about the price they pay for bottled milk when dairy farmers are earning their smallest profits.


This is an inference questions.
from
When the raw-milk price is falling, however, the markups are greatest.

we can draw inference D
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 [#permalink] New post 03 Apr 2006, 12:27
one more for 'D'
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 [#permalink] New post 03 Apr 2006, 18:08
C it is.

Here's my attempt to explain:
A - it's the other way around.
B & E are out because dairy farmers is out of scope.
D - nothing is indicated about the timing of price-adjustments to fluctuations in raw-milk prices. Also, a little bit extreme when stating generally do not respond
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 [#permalink] New post 03 Apr 2006, 20:10
'D' it is.

Complaints that milk bottlers take enormous markups on the bottled milk sold to consumers are most likely to arise when least warranted by the actual spread between the price that bottlers pay for raw milk and the price at which they sell bottled milk. The complaints occur when the bottled-milk price rises, yet these price increases most often merely reflect the rising price of the raw milk that bottlers buy from dairy farmers. When the raw-milk price is rising, the bottlers’ markups are actually smallest proportionate to the retail price. When the raw-milk price is falling, however, the markups are greatest.


(D) Milk bottlers generally do not respond to a decrease in raw-milk prices by straightaway proportionately lowering the price of the bottled milk they sell.

'D' is clearly explained by the last 2 sentences.
  [#permalink] 03 Apr 2006, 20:10
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