First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.
If the statements above are true, which of the following is most strongly supported by them?
(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers. (B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year. (C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year. (D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year. (E) PXC's production costs for its computers were lower last year than they had been the previous year.
saikarthikreddy
Re: First-time computer buyers buying PXC home computers [#permalink]
D .Assume that the no of computers sold are the same for both the years .Since the propotion of the number of computers bought by first timers is less last year .It leads to a higher profit since more number of computers are bought by people who are replacing their old computers .
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First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.
If the statements above are true, which of the following is most strongly supported by them?
(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers. - but the number of PXC computers sold remained constant. (B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year. - correct (C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year. - irrelevant (D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year. - irrelevant (E) PXC's production costs for its computers were lower last year than they had been the previous year. - profit margins are constant, so this can't be the answer.
All the other variables remaining the same as in the year before, number of first time and second-time buyers would decide the final profit margins (lower or higher).
In this case the profits are higher hence number of second time buyers > number of first time buyers.
The question clearly shows that of the bought computers the majority of the computers are replacements as only that way the profit margins would be more and thus D, D shows that the proportion of 1st time buyers is less
First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models.Last year PXC's profits from computer sales were substantially higher than the previous year,
Quote:
although about the same number of PXC computers were sold
and the prices and profit margins for each computer model that PXC sells remained unchanged.
All the other variables remaining the same as in the year before, number of first time and second-time buyers would decide the final profit margins (lower or higher).
In this case the profits are higher hence number of second time buyers > number of first time buyers.
I also agree with D.
But C is also a strong contender because it also tells us that there are more no. of sales of costly computers. But, we can eliminate this because the argument uses the word 'TYPICALLY' in the first statement, which means even first time buyers are also buying costly computers. This fact is reflected only in D but not in C.
Re: First-time computer buyers buying PXC home computers [#permalink]
Posted: Sun Feb 05, 2012 9:26 pm
Manager
Status: MBA Aspirant Joined: Sat Jun 12, 2010 Posts: 200 Location: India
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Clear D for me, as well!! The truth is that I got confused with the difference between "last year" and "previous year". I thought it was the same. (Clearly not a native speaker!!)
iwillcrackgmat
Re: First-time computer buyers buying PXC home computers [#permalink]
Posted: Wed Feb 15, 2012 7:22 am
Manager
Joined: Sun Jan 22, 2012 Posts: 75
Concentration: General Management, Technology GMAT 1: 570 Q39 V29
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First-time computer buyers buying PXC home computers typically buy models that cost much less and have a smaller profit margin per computer than do PXC computers bought by people replacing their computers with more powerful models. Last year PXC's profits from computer sales were substantially higher than the previous year, although about the same number of PXC computers were sold and the prices and profit margins for each computer model that PXC sells remained unchanged.
If the statements above are true, which of the following is most strongly supported by them?
(A) PXC's competitors raised the prices on their computers last year, making PXC computers more attractive to first-time computer buyers. - but the number of PXC computers sold remained constant so its not the correct option. (B) The number of people buying PXC computers who also bought PXC computer-related products, such as printers, was larger last year than the previous year. - not relevant question didnt speak about other products. (C) Among computer buyers who bought a PXC computer to replace their existing computer, the proportion who were replacing a computer made by a competitor of PXC was greater last year than the previous year. --- this doesnt speak about the raise in profits of PXC - irrelevant (D) The proportion of PXC computers bought by first-time computer buyers was smaller last year than the previous year. - since first time buyers are smaller the replacement buyers are more and the sales are constant the replacement sales resulted in more profits so correct answer. (E) PXC's production costs for its computers were lower last year than they had been the previous year. - profit margins are constant, so this can't be the answer.
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