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# Manufacturers of mechanical pencils make most of the profit

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Director
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Manufacturers of mechanical pencils make most of the profit [#permalink]  26 Jul 2007, 04:22
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(N/A)

Question Stats:

62% (01:00) correct 38% (01:12) wrong based on 68 sessions
Manufacturers of mechanical pencils make most of the profit on pencil leads rather than on the pencils themselves. The Write Company, which cannot sell its leads as cheaply as other manufacturers can, plans to alter the design of its mechanical pencil so that it will accept only a new designed Write Company lead, which will be sold at the same price as the Write Company's current lead.

Which of the following, if true, most strongly supports the Write Company's projection that its plan will lead to an increase in its sales of pencil leads?

(A) First-time buyers of mechanical pencils tend to buy the least expensive mechanical pencils available.

(B) Annual sales of mechanical pencils are expected to triple over the next five years.

(C) A Write Company executive is studyiing ways to reduce the cost of manufacturing pencil leads.

(D) A rival manufacturer recently announced similar plans to introduce a mechanical pencil that would accept only the leads produced by that manufacturer.

(E) In extensive test marketing, mechanical-pencil users found the new Write Company pencil markedly superior to other mechanical pencils they had used.
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Re: CR - Manufacturers of pencils [#permalink]  01 Dec 2010, 09:40
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artistocrat wrote:
This question can be found in GMATPrep>Practice Content>Review Questions>Q.14

I agree that just because a product is superior doesn't guarantee an increase in sales. You could just as easily argue that if the market for mechanical pencils expands, assuming market share is constant, then there will be an increase in sales as in B.

For these reasons, I believe that the question is poorly written.

Yes, I do agree with you. The product, though superior is more expensive. So there is no guarantee that its sales will increase. Also, in its own way, even B strengthens the argument. If overall sales increase, there is a good chance that this company's sales will also increase.

But, if you need to make the best of a given question, it would be good to note that E strengthens the argument more than B. B gives you an outside factor that could increase the sales. E is an inherent quality of the product that could increase sales.
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Get started with Veritas Prep GMAT On Demand for $199 Veritas Prep Reviews Director Joined: 15 Jun 2007 Posts: 504 Followers: 1 Kudos [?]: 9 [0], given: 0 [#permalink] 26 Jul 2007, 05:19 The assumption is that people will buy more of the new pencil type in the future. (E) gives a reason why more people would buy the new Wright pencil. (B) is tempting but it doesn't offer any information regarding Wright pencils and there is no reason to assume that Wright sales will increase with the market. Director Joined: 31 Mar 2007 Posts: 586 Location: Canada eh Followers: 7 Kudos [?]: 47 [0], given: 0 [#permalink] 30 Jul 2007, 01:53 Very weakly worded question. Where did you find this one? The underlying assumption is that most people buy this particular mechanical pencil..... A-D have nothing to do with that. E addresses it directly, although it's not 100% as just because it's a superiour car, doesn't mean most people buy it etc...... ie a Ferrari is a superiour car, or a Lamborghini, but most people can't afford it =P Director Joined: 06 Sep 2006 Posts: 745 Followers: 1 Kudos [?]: 19 [0], given: 0 [#permalink] 30 Jul 2007, 09:15 StartupAddict wrote: Very weakly worded question. Where did you find this one? The underlying assumption is that most people buy this particular mechanical pencil..... A-D have nothing to do with that. E addresses it directly, although it's not 100% as just because it's a superiour car, doesn't mean most people buy it etc...... ie a Ferrari is a superiour car, or a Lamborghini, but most people can't afford it =P LSAT from 1000 CR. Manager Joined: 17 May 2007 Posts: 179 Followers: 1 Kudos [?]: 7 [0], given: 0 [#permalink] 30 Jul 2007, 10:01 I go with answer E ... Intern Joined: 17 Jun 2008 Posts: 7 Followers: 0 Kudos [?]: 0 [0], given: 1 Re: CR - Manufacturers of pencils [#permalink] 29 Nov 2010, 19:31 This question can be found in GMATPrep>Practice Content>Review Questions>Q.14 I agree that just because a product is superior doesn't guarantee an increase in sales. You could just as easily argue that if the market for mechanical pencils expands, assuming market share is constant, then there will be an increase in sales as in B. For these reasons, I believe that the question is poorly written. Manager Joined: 23 Nov 2009 Posts: 90 Schools: Wharton..:) Followers: 2 Kudos [?]: 36 [0], given: 14 Re: CR - Manufacturers of pencils [#permalink] 01 Dec 2010, 10:11 Yes, I do agree with you. The product, though superior is more expensive. So there is no guarantee that its sales will increase. Also, in its own way, even B strengthens the argument. If overall sales increase, there is a good chance that this company's sales will also increase. But, if you need to make the best of a given question, it would be good to note that E strengthens the argument more than B. B gives you an outside factor that could increase the sales. E is an inherent quality of the product that could increase sales. nice explanation ..+1 to you.. also in B if sales triple may be the company metioned is not the one to be benifited , may be some other company will sweep the market because of several reasons for ex lesser cost ,better quality etc..so clearly E wins.. _________________ " What [i] do is not beyond anybody else's competence"- warren buffett My Gmat experience -http://gmatclub.com/forum/gmat-710-q-47-v-41-tips-for-non-natives-107086.html Manager Joined: 17 Sep 2010 Posts: 216 Concentration: General Management, Finance GPA: 3.59 WE: Corporate Finance (Entertainment and Sports) Followers: 3 Kudos [?]: 14 [0], given: 33 Re: CR - Manufacturers of pencils [#permalink] 01 Dec 2010, 11:22 What's the OA? asaf wrote: Manufacturers of mechanical pencils make most of the profit on pencil leads rather than on the pencils themselves. The Write Company, which cannot sell its leads as cheaply as other manufacturers can, plans to alter the design of its mechanical pencil so that it will accept only a new designed Write Company lead, which will be sold at the same price as the Write Company's current lead. Which of the following, if true, most strongly supports the Write Company's projection that its plan will lead to an increase in its sales of pencil leads? (A) First-time buyers of mechanical pencils tend to buy the least expensive mechanical pencils available. (B) Annual sales of mechanical pencils are expected to triple over the next five years. (C) A Write Company executive is studyiing ways to reduce the cost of manufacturing pencil leads. (D) A rival manufacturer recently announced similar plans to introduce a mechanical pencil that would accept only the leads produced by that manufacturer. (E) In extensive test marketing, mechanical-pencil users found the new Write Company pencil markedly superior to other mechanical pencils they had used. Veritas Prep GMAT Instructor Joined: 16 Oct 2010 Posts: 5854 Location: Pune, India Followers: 1481 Kudos [?]: 7957 [0], given: 190 Re: CR - Manufacturers of pencils [#permalink] 01 Dec 2010, 12:44 Expert's post OA is (E). USCTrojan2006 wrote: What's the OA? asaf wrote: Manufacturers of mechanical pencils make most of the profit on pencil leads rather than on the pencils themselves. The Write Company, which cannot sell its leads as cheaply as other manufacturers can, plans to alter the design of its mechanical pencil so that it will accept only a new designed Write Company lead, which will be sold at the same price as the Write Company's current lead. Which of the following, if true, most strongly supports the Write Company's projection that its plan will lead to an increase in its sales of pencil leads? (A) First-time buyers of mechanical pencils tend to buy the least expensive mechanical pencils available. (B) Annual sales of mechanical pencils are expected to triple over the next five years. (C) A Write Company executive is studyiing ways to reduce the cost of manufacturing pencil leads. (D) A rival manufacturer recently announced similar plans to introduce a mechanical pencil that would accept only the leads produced by that manufacturer. (E) In extensive test marketing, mechanical-pencil users found the new Write Company pencil markedly superior to other mechanical pencils they had used. _________________ Karishma Veritas Prep | GMAT Instructor My Blog Get started with Veritas Prep GMAT On Demand for$199

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Re: CR - Manufacturers of pencils [#permalink]  02 Dec 2010, 19:06
Like Karishma stated, E seems to be better than B...
So I chose E.
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Re: CR - Manufacturers of pencils [#permalink]  02 Dec 2010, 22:38
I believe the argument says the lead is more expensive but not mechanical pencil itself is more expensive. The argument has to do with selling more pencils through which more lead would be sold at a more expensive price. E suggests more pencils will be sold because they are superior (not more expensive), hence leading to an increase in pencil lead sold.

akshathbs wrote:
Yes, I do agree with you. The product, though superior is more expensive. So there is no guarantee that its sales will increase. Also, in its own way, even B strengthens the argument. If overall sales increase, there is a good chance that this company's sales will also increase.

But, if you need to make the best of a given question, it would be good to note that E strengthens the argument more than B. B gives you an outside factor that could increase the sales. E is an inherent quality of the product that could increase sales.

nice explanation ..+1 to you..
also in B if sales triple may be the company metioned is not the one to be benifited , may be some other company
will sweep the market because of several reasons for ex lesser cost ,better quality etc..so clearly E wins..
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Re: CR - Manufacturers of pencils [#permalink]  03 Dec 2010, 04:41
Expert's post
gettinit wrote:
I believe the argument says the lead is more expensive but not mechanical pencil itself is more expensive. The argument has to do with selling more pencils through which more lead would be sold at a more expensive price. E suggests more pencils will be sold because they are superior (not more expensive), hence leading to an increase in pencil lead sold.

I do agree with you. The argument does say that the company's lead is more expensive than the pencil. But it is a matter of interpretation. Using the pencil will be more expensive than using some other pencil because it will take only the expensive lead. e.g. if you go to buy a humidifier, you will check out the cost of its filter too before you buy it since you will need to regularly replace it. If the humidifier is the same cost as others but the filter is more expensive, using that particular humidifier becomes more expensive. Hence, effectively their product, the new mechanical pencil, is going to be more expensive than others (assuming the cost of the pencil itself is similar to others). Since they are superior, they have a better chance of experiencing higher sales, nevertheless.
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Director
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Re: Manufacturers of mechanical pencils make most of the profit [#permalink]  10 May 2015, 00:01
Conclusion : Write Company's projection that its plan will lead to an increase in its sales of pencil leads
Premise : WC's pencil will accept only pencil leads manufactured by WC
.

(A) First-time buyers of mechanical pencils tend to buy the least expensive mechanical pencils available -> Doesn't impact WC's pencil leads

(B) Annual sales of mechanical pencils are expected to triple over the next five years. -> What about WC's pencil sales?

(C) A Write Company executive is studying ways to reduce the cost of manufacturing pencil leads. -> OFS

(D) A rival manufacturer recently announced similar plans to introduce a mechanical pencil that would accept only the leads produced by that manufacturer.-> OFS. We are concerned with WC's sales

(E) In extensive test marketing, mechanical-pencil users found the new Write Company pencil markedly superior to other mechanical pencils they had used. -> Correct
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Re: Manufacturers of mechanical pencils make most of the profit   [#permalink] 10 May 2015, 00:01
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