Fish currently costs about the same at seafood stores : GMAT Critical Reasoning (CR)
Check GMAT Club Decision Tracker for the Latest School Decision Releases http://gmatclub.com/AppTrack

 It is currently 22 Jan 2017, 06:16

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Fish currently costs about the same at seafood stores

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics
Author Message
TAGS:

### Hide Tags

VP
Joined: 03 Apr 2007
Posts: 1367
Followers: 4

Kudos [?]: 613 [9] , given: 10

Fish currently costs about the same at seafood stores [#permalink]

### Show Tags

27 May 2008, 18:09
9
KUDOS
19
This post was
BOOKMARKED
00:00

Difficulty:

45% (medium)

Question Stats:

63% (02:17) correct 37% (01:31) wrong based on 1432 sessions

### HideShow timer Statistics

Fish currently costs about the same at seafood stores throughout Eastville and its surrounding suburbs. Seafood stores buy fish from the same wholesalers and at the same prices, and other business expenses have also been about the same. But new tax breaks will substantially lower the cost of doing business within the city. Therefore, in the future, profit margins will be higher at seafood stores within the city than at suburban seafood stores.

For the purposes of evaluating the argument, it would be most useful to know whether

(A) More fish wholesalers are located within the city than in the surrounding suburbs
(B) Any people who currently own seafood stores in the suburbs surrounding Eastville will relocate their businesses nearer to the city
(C) The wholesale price of fish is likely to fall in the future
(D) Fish has always cost about the same at seafood stores throughout Eastville and its surrounding suburbs
(E) Seafood stores within the city will in the future set prices that are lower than those at suburban seafood stores
[Reveal] Spoiler: OA
If you have any questions
you can ask an expert
New!
SVP
Joined: 04 May 2006
Posts: 1926
Schools: CBS, Kellogg
Followers: 23

Kudos [?]: 1013 [0], given: 1

Re: CR-Fish stores [#permalink]

### Show Tags

27 May 2008, 18:25
D for me!
_________________
Intern
Joined: 10 Apr 2006
Posts: 5
Followers: 0

Kudos [?]: 3 [3] , given: 0

Re: CR-Fish stores [#permalink]

### Show Tags

27 May 2008, 18:51
3
KUDOS
E for me. Profit margins would be dictated by price set minus the wholesale price. So the missing link would have to do with the price set.
CEO
Joined: 17 May 2007
Posts: 2989
Followers: 60

Kudos [?]: 581 [0], given: 210

Re: CR-Fish stores [#permalink]

### Show Tags

27 May 2008, 22:07
Another E, for reasons mentioned above. Good question +1.
Manager
Joined: 11 Apr 2008
Posts: 156
Schools: Kellogg(A), Wharton(W), Columbia(D)
Followers: 1

Kudos [?]: 64 [0], given: 0

Re: CR-Fish stores [#permalink]

### Show Tags

27 May 2008, 22:10
IMO E too.
Director
Joined: 18 Feb 2008
Posts: 798
Followers: 21

Kudos [?]: 119 [0], given: 25

Re: CR-Fish stores [#permalink]

### Show Tags

27 May 2008, 22:21
1
This post was
BOOKMARKED
E,
if they will lower the price, they might end up with same profit margin as before.
Director
Joined: 23 Sep 2007
Posts: 789
Followers: 5

Kudos [?]: 185 [0], given: 0

Re: CR-Fish stores [#permalink]

### Show Tags

27 May 2008, 22:23
D for me

If the retail prices were the same in the city and the suburb, then the new tax break would help city stores. And D tells you definitively that the prices has always been the same for city and suburb.

In E, what if the price in the city is already lower than in the suburb?

Or that the price in the city is already higher than the suburb? In this case, the profit margin is already higher, not just will be higher.
VP
Joined: 03 Apr 2007
Posts: 1367
Followers: 4

Kudos [?]: 613 [0], given: 10

Re: CR-Fish stores [#permalink]

### Show Tags

28 May 2008, 19:15
1
This post was
BOOKMARKED
gmatnub wrote:
D for me

If the retail prices were the same in the city and the suburb, then the new tax break would help city stores. And D tells you definitively that the prices has always been the same for city and suburb.

In E, what if the price in the city is already lower than in the suburb?

Or that the price in the city is already higher than the suburb? In this case, the profit margin is already higher, not just will be higher.

Conclusion:
Therefore, in the future, profit margins will be higher at seafood stores within the city than at
suburban seafood stores.

>>>We can come to teh conclusion when we know about the prices set at the stores within the city and the surban stores.
VP
Joined: 03 Apr 2007
Posts: 1367
Followers: 4

Kudos [?]: 613 [0], given: 10

Re: CR-Fish stores [#permalink]

### Show Tags

28 May 2008, 19:16
OA is E
Director
Joined: 23 Sep 2007
Posts: 789
Followers: 5

Kudos [?]: 185 [0], given: 0

Re: CR-Fish stores [#permalink]

### Show Tags

28 May 2008, 20:04
I disagree with the supposed E OA

Here is an example:

let say the current cost of a fish is $5 including tax suburbs sell for$10, current profit $5 cities sell for$8, current profit is $3 After$1 tax break

it costs suburbs $5 a fish, but only cost cities$4 a fish

suburbs sell for $10, suburbs profit will continue to be$5

cities sell for $8, but cities profit will increase to$4 (still lower profit than suburbs)

BUT if cities sells for $9.50, cities profit will increase to$5.50 (higher profit than suburbs, BUT still lower selling price)

So the lower selling price of the city stores can still generate higher profit than suburb stores. The relative prices of city to suburb stores don't necessary correlate to the actual profit comparison.
CEO
Joined: 17 May 2007
Posts: 2989
Followers: 60

Kudos [?]: 581 [0], given: 210

Re: CR-Fish stores [#permalink]

### Show Tags

28 May 2008, 21:03
1
This post was
BOOKMARKED
Mate read the question premise:

"Fish currently costs about the same at seafood stores throughout Eastville and its
surrounding suburbs. Seafood stores buy fish from the same wholesalers and at the
same prices, and other business expenses have also been about the same"

This means currently the profits are identical.

gmatnub wrote:
I disagree with the supposed E OA

Here is an example:

let say the current cost of a fish is $5 including tax suburbs sell for$10, current profit $5 cities sell for$8, current profit is $3 After$1 tax break

it costs suburbs $5 a fish, but only cost cities$4 a fish

suburbs sell for $10, suburbs profit will continue to be$5

cities sell for $8, but cities profit will increase to$4 (still lower profit than suburbs)

BUT if cities sells for $9.50, cities profit will increase to$5.50 (higher profit than suburbs, BUT still lower selling price)

So the lower selling price of the city stores can still generate higher profit than suburb stores. The relative prices of city to suburb stores don't necessary correlate to the actual profit comparison.
Director
Joined: 23 Sep 2007
Posts: 789
Followers: 5

Kudos [?]: 185 [0], given: 0

Re: CR-Fish stores [#permalink]

### Show Tags

28 May 2008, 21:22
bsd_lover wrote:
Mate read the question premise:

"Fish currently costs about the same at seafood stores throughout Eastville and its
surrounding suburbs. Seafood stores buy fish from the same wholesalers and at the
same prices, and other business expenses have also been about the same"

Thanks, I somehow missed the first sentence. You are right.
CEO
Joined: 17 May 2007
Posts: 2989
Followers: 60

Kudos [?]: 581 [1] , given: 210

Re: CR-Fish stores [#permalink]

### Show Tags

28 May 2008, 21:24
1
KUDOS
Dont worry I do it all the time
Director
Joined: 23 Sep 2007
Posts: 789
Followers: 5

Kudos [?]: 185 [0], given: 0

Re: CR-Fish stores [#permalink]

### Show Tags

28 May 2008, 21:27
bsd_lover wrote:
Dont worry I do it all the time

Yes that is true, but you are the only person who explained my overlook.
Manager
Joined: 28 Apr 2008
Posts: 133
Followers: 2

Kudos [?]: 52 [1] , given: 0

Re: CR-Fish stores [#permalink]

### Show Tags

29 May 2008, 02:58
1
KUDOS
goalsnr wrote:
Fish currently costs about the same at seafood stores throughout Eastville and its
surrounding suburbs. Seafood stores buy fish from the same wholesalers and at the
same prices, and other business expenses have also been about the same. But new tax
breaks will substantially lower the cost of doing business within the city. Therefore, in
the future, profit margins will be higher at seafood stores within the city than at
suburban seafood stores.
For the purposes of evaluating the argument, it would be most useful to know
whether.
(A)more fish wholesalers are located within the city than in the surrounding suburbs.
>> out of scope
(B) Any people who currently own seafood stores in the suburbs surrounding Eastville
will relocate their businesses nearer to the city
>> irrelevant
(C) The wholesale price of fish is likely to fall in the future
>> this would effect suburbian stores also.
(D)Fish has always cost about the same at seafood stores throughout Eastville and its
surrounding suburbs.
>> we are already given this information.
(E) Seafood stores within the city will in the future set prices that are lower than those
at suburban seafood stores

Manager
Joined: 24 Jan 2010
Posts: 164
Location: India
Schools: ISB
Followers: 2

Kudos [?]: 53 [0], given: 14

Re: CR-Fish stores [#permalink]

### Show Tags

07 Jun 2010, 09:20
E for me too....
_________________

_________________
If you like my post, consider giving me a kudos. THANKS!

Manager
Joined: 15 Apr 2010
Posts: 170
Followers: 4

Kudos [?]: 70 [0], given: 3

Re: CR-Fish stores [#permalink]

### Show Tags

08 Jun 2010, 04:51
E for me too
Manager
Joined: 19 Feb 2010
Posts: 81
Followers: 2

Kudos [?]: 34 [1] , given: 6

Re: CR-Fish stores [#permalink]

### Show Tags

08 Jun 2010, 05:00
1
KUDOS
nice!
_________________

Yogesh Agarwal
yogeshagarwala@gmail.com

CONSIDER AWARDING KUDOS IF MY POST HELPS !!!

Intern
Joined: 21 May 2010
Posts: 2
Followers: 0

Kudos [?]: 0 [0], given: 0

Re: CR-Fish stores [#permalink]

### Show Tags

08 Jun 2010, 06:57
My answer would be D. Profit margin is nothing but ( Profit / revenue ) * 100.
If the fish selling stores maintain the same price, then certainly profit margin increases.
I am not convinced with the answer choice 'E'.
Could anyone explain me why the answer is not 'D'.
Senior Manager
Affiliations: ACA, CPA
Joined: 26 Apr 2009
Posts: 441
Location: Vagabond
Schools: BC
WE 1: Big4, Audit
WE 2: Banking
Followers: 5

Kudos [?]: 86 [0], given: 41

Re: CR-Fish stores [#permalink]

### Show Tags

10 Jun 2010, 00:26
1
This post was
BOOKMARKED
You need the selling price for calculating the margin. D only talks about cost. Also, D is redundant as it is a rephrase of an info already given in the stem of the question.

E is the only one that talks about the selling price.

mohansrinivas wrote:
My answer would be D. Profit margin is nothing but ( Profit / revenue ) * 100.
If the fish selling stores maintain the same price, then certainly profit margin increases.
I am not convinced with the answer choice 'E'.
Could anyone explain me why the answer is not 'D'.

_________________

If you have made mistakes, there is always another chance for you. You may have a fresh start any moment you choose, for this thing we call "failure" is not the falling down, but the staying down.

Re: CR-Fish stores   [#permalink] 10 Jun 2010, 00:26

Go to page    1   2   3    Next  [ 57 posts ]

Similar topics Replies Last post
Similar
Topics:
The fishing industry cannot currently be relied upon to help the gover 2 16 Dec 2016, 18:12
1 Seafood restaurants in Snare Island generally... 1 02 Oct 2013, 21:18
1 Fish currently costs about the same at seafood stores 5 10 Oct 2010, 03:55
1 Fresh potatoes generally cost about $2 for a 10-pound bag, 7 12 Jun 2008, 14:38 Fresh potatoes generally cost about$2 for a 10-pound bag, 6 09 Jan 2008, 10:48
Display posts from previous: Sort by

# Fish currently costs about the same at seafood stores

 new topic post reply Question banks Downloads My Bookmarks Reviews Important topics

 Powered by phpBB © phpBB Group and phpBB SEO Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.