Find all School-related info fast with the new School-Specific MBA Forum

It is currently 23 Oct 2014, 08:58

Close

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
Your Progress

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

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

In contrast to many speculators, demand for SUV (sports

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Senior Manager
Senior Manager
avatar
Joined: 10 Apr 2012
Posts: 279
Location: United States
Concentration: Technology, Other
GPA: 2.44
WE: Project Management (Telecommunications)
Followers: 2

Kudos [?]: 174 [0], given: 323

GMAT ToolKit User Premium Member CAT Tests
In contrast to many speculators, demand for SUV (sports [#permalink] New post 19 Apr 2013, 08:09
00:00
A
B
C
D
E

Difficulty:

  15% (low)

Question Stats:

77% (02:18) correct 23% (01:16) wrong based on 102 sessions
In contrast to many speculators, demand for SUV (sports utility vehicles) has not increased in recent years. Yet, even though prices and production amounts have generally been stable during the last three years, SUV manufacturers last year increased their profits by more than 10 percent over the previous year's level.

Any of the following statements, if true about last year, helps to explain the rise in profits EXCEPT:

(A)Many countries, like Thailand, that have a preference for SUVs increased their production of SUVs in hopes of taking market share away from sedans and coupes.

(B)SUV manufacturers have saved money on wages by switching from paying assembly workers an hourly wage to paying them per vehicle assembled.

(C)The price of oil, the major energy source used by SUV manufacturers in machining their vehicle components, dropped by over 25 percent.

(D)Many small SUV manufacturers joined together to form an association of SUV manufacturers and began to buy vehicle components at low group rates.

(E)Temperatures in manufacturing facilities were lower than they had been during the previous year, allowing the manufacturers to save money on expensive heat and electricity-powered ventilation systems.
[Reveal] Spoiler: OA
1 KUDOS received
VP
VP
User avatar
Status: Far, far away!
Joined: 02 Sep 2012
Posts: 1125
Location: Italy
Concentration: Finance, Entrepreneurship
GPA: 3.8
Followers: 113

Kudos [?]: 1195 [1] , given: 219

GMAT ToolKit User
Re: In contrast to many speculators, demand for SUV [#permalink] New post 19 Apr 2013, 08:15
1
This post received
KUDOS
Demand = stable
Price = stable
Production = stable

Profits = UP, clearly profits are a function of (REVENUES - COSTS) every component of the revenues (see above) is stable ==> cost must have been lower this year.

All the options give us possible scenarios in which this happened.
(ie: (B)SUV manufacturers have saved money on wages by switching from paying assembly workers an hourly wage to paying them per vehicle assembled.
(C)The price of oil, the major energy source used by SUV manufacturers in machining their vehicle components, dropped by over 25 percent.)

Only A doesn't, so A
_________________

It is beyond a doubt that all our knowledge that begins with experience.

Kant , Critique of Pure Reason

Tips and tricks: Inequalities , Mixture | Review: MGMAT workshop
Strategy: SmartGMAT v1.0 | Questions: Verbal challenge SC I-II- CR New SC set out !! , My Quant

Rules for Posting in the Verbal Forum - Rules for Posting in the Quant Forum[/size][/color][/b]

Manager
Manager
avatar
Joined: 10 Mar 2013
Posts: 136
Followers: 2

Kudos [?]: 41 [0], given: 3

Premium Member
Re: In contrast to many speculators, demand for SUV [#permalink] New post 19 Apr 2013, 08:16
looks like A is best
all except A help to explain the rise in profit
Senior Manager
Senior Manager
User avatar
Joined: 19 Apr 2011
Posts: 290
Schools: Booth,NUS,St.Gallon
Followers: 4

Kudos [?]: 91 [0], given: 51

Re: In contrast to many speculators, demand for SUV [#permalink] New post 19 Apr 2013, 09:49
Yes A is the best answer.Increase in the production of SUV alone is not going to bring down the cost in anyway.
_________________

+1 if you like my explanation .Thanks :)

Current Student
avatar
Status: Final Lap Up!!!
Affiliations: NYK Line
Joined: 21 Sep 2012
Posts: 1097
Location: India
GMAT 1: 410 Q35 V11
GMAT 2: 530 Q44 V20
GMAT 3: 630 Q45 V31
GPA: 3.84
WE: Engineering (Transportation)
Followers: 31

Kudos [?]: 274 [0], given: 67

Re: In contrast to many speculators, demand for SUV [#permalink] New post 19 Apr 2013, 12:22
Its clear A.....u can find similar question in OG 13....

contrary-to-earlier-predictions-demand-for-sugarcane-has-58533.html

Consider Kudos If my post helps!!!

Archit
Verbal Forum Moderator
Verbal Forum Moderator
User avatar
Joined: 15 Jun 2012
Posts: 1120
Location: United States
Followers: 136

Kudos [?]: 1377 [0], given: 122

Re: In contrast to many speculators, demand for SUV [#permalink] New post 19 Apr 2013, 15:17
guerrero25 wrote:
In contrast to many speculators, demand for SUV (sports utility vehicles) has not increased in recent years. Yet, even though prices and production amounts have generally been stable during the last three years, SUV manufacturers last year increased their profits by more than 10 percent over the previous year's level.

Any of the following statements, if true about last year, helps to explain the rise in profits EXCEPT:

(A)Many countries, like Thailand, that have a preference for SUVs increased their production of SUVs in hopes of taking market share away from sedans and coupes.

(B)SUV manufacturers have saved money on wages by switching from paying assembly workers an hourly wage to paying them per vehicle assembled.

(C)The price of oil, the major energy source used by SUV manufacturers in machining their vehicle components, dropped by over 25 percent.

(D)Many small SUV manufacturers joined together to form an association of SUV manufacturers and began to buy vehicle components at low group rates.

(E)Temperatures in manufacturing facilities were lower than they had been during the previous year, allowing the manufacturers to save money on expensive heat and electricity-powered ventilation systems.


Profit = Revenue - Cost.
Demand has not increased ==> Revenue has not increased.
Profit increases only if cost decreases.
B, C, D, E mention the ways by which SUV manufactures can reduce costs.
So A is correct.
_________________

Please +1 KUDO if my post helps. Thank you.

"Designing cars consumes you; it has a hold on your spirit which is incredibly powerful. It's not something you can do part time, you have do it with all your heart and soul or you're going to get it wrong."

Chris Bangle - Former BMV Chief of Design.

Manager
Manager
avatar
Joined: 11 Aug 2012
Posts: 137
Schools: HBS '16, Stanford '16
Followers: 0

Kudos [?]: 30 [0], given: 16

Re: In contrast to many speculators, demand for SUV (sports [#permalink] New post 29 May 2013, 10:49
+1 A

This is not a weaken question; it is a resolve the paradox question.
Manager
Manager
avatar
Joined: 09 Apr 2013
Posts: 140
Location: India
WE: Supply Chain Management (Consulting)
Followers: 1

Kudos [?]: 37 [0], given: 18

Re: In contrast to many speculators, demand for SUV (sports [#permalink] New post 14 Jun 2014, 07:08
All the choices except A help explain the discrepancy in the argument, while choice A negates the premise that the production levels are stable over the past three years. Hence +A is the answer.
_________________

+1 KUDOS is the best way to say thanks :-)

"Those, who never do any more than they get paid for, never get paid for any more than they do"

Re: In contrast to many speculators, demand for SUV (sports   [#permalink] 14 Jun 2014, 07:08
    Similar topics Author Replies Last post
Similar
Topics:
Experts publish their posts in the topic Crab fishing is not considered a sport by many BeckyRobinsonTPR 0 16 Sep 2013, 21:11
4 In contrast to india,where many early followers of mun23 7 15 Mar 2013, 09:11
1 Contrast amitdgr 2 09 Oct 2008, 07:41
For many people, household labor remains demanding even if okdongdong 4 26 Jul 2005, 22:53
For many people, household labor remains demanding even if prasad_bgv 2 05 Jan 2005, 22:06
Display posts from previous: Sort by

In contrast to many speculators, demand for SUV (sports

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

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®.