Marcab wrote:
Footwear designer John de los Santos last year released several limited editions of his best-known model of sneaker in exotic colors and prints. Although the new releases were priced substantially higher than their counterparts in more traditional colors, they sold out within a week of their release, and have since been selling on the resale market for up to four times the original price. The cost of producing the sneakers in exotic prints is no greater than that of producing them in more traditional colors, so de los Santos could earn a higher profit per unit by producing a greater percentage of his sneakers in such prints.
Which of the following is an assumption made in drawing the conclusion above?
a)The designers who compete most directly with de los Santos will not produce similar lines of limited-edition sneakers in the near future.
b)Consumers' willingness to pay higher prices for the exotic sneakers was not influenced by the relative scarcity of those sneakers.
c)De los Santos's customer base is not shifting in the direction of younger consumers who prefer bolder styles.
d)De los Santos's sneakers are not priced substantially higher than those of the designers who compete most directly with him.
e)The workmanship of de los Santos's sneakers is of such high quality that it is impossible for lower-budget shoemakers to produce counterfeit versions of them.
OA
The answer is (B). Let's discuss why. Then we will talk about why (A) and (E) are incorrect.
Conclusion: Make higher % of sneakers in exotic prints to earn a higher profit per unit.
An assumption is necessary to be true for the conclusion to be true. If we negate the assumption, the conclusion should not be possible. If there is a confusion, we negate the assumption and then see whether the conclusion can hold. If the conclusion can still hold, then that option is not an assumption.
What is the assumption in concluding that making more sneakers will bring higher profit per unit? The assumption is that the price of exotic print sneakers will not come down if higher % of sneakers are in exotic prints i.e. scarcity is not the reason for the higher price. If this assumption were not true and the price does come down if higher % of sneakers are made in exotic prints, then he may not be able to earn a higher profit per unit.
(A) - We are talking about limited-edition sneakers here. As long as the designers keep the exotic sneakers rare, there may not be a problem. The price may not come down. Let's assume that (A) is not true and designers do come up with similar limited edition sneakers. Still, the price may not go down.
(E) - This option has nothing to do with regular and exotic prints. If lower-budget shoemakers are able to make counterfeits, they would have been making it for all shoes. Hence, they will have no new effect on the price of the genuine de los Santos shoes.
The thing that could have a direct effect on the price of exotic shoes is how many exotic shoes there are. Answer has to be (B).