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Mechanicorp s newest product costs so little to make that it [#permalink]
 16 Oct 2009, 13:18
Question Stats:
75% (02:16) correct
25% (02:00) wrong based on 0 sessions
Mechanicorp’s newest product costs so little to make that it appears doubtful the company will be able to sell it without increasing the markup the company usually allows for profit: potential clients would simply not believe that something so inexpensive would really work. Yet Mechanicorp’s reputation is built on fair prices incorporating only modest profit margins.
The statements above, if true, most strongly support which of the following?
(A) Mechanicorp will encounter difficulties in trying to set a price for its newest product that will promote sales without threatening to compromise the company’s reputation.
(B) Mechanicorp achieves large annual profits, despite small profits per unit sold, by means of a high volume of sales.
(C) Mechanicorp made a significant computational error in calculating the production costs for its newest product.
(D) Mechanicorp’s newest product is intended to perform tasks that can be performed by other devices costing less to manufacture.
(E) Mechanicorp’s production processes are designed with the same ingenuity as are the products that the company makes.
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Re: Mechanicorp’s Product Costs [#permalink]
16 Oct 2009, 14:10
will go with B
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Re: Mechanicorp’s Product Costs [#permalink]
16 Oct 2009, 14:45
I vote for [A].
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Re: Mechanicorp’s Product Costs [#permalink]
16 Oct 2009, 15:26
A) Mechanicorp will encounter difficulties in trying to set a price for its newest product that will promote sales without threatening to compromise the company’s reputation. Correct (B) Mechanicorp achieves large annual profits, despite small profits per unit sold, by means of a high volume of sales. Irrelevant (C) Mechanicorp made a significant computational error in calculating the production costs for its newest product. Out of scope (D) Mechanicorp’s newest product is intended to perform tasks that can be performed by other devices costing less to manufacture. Out of scope (E) Mechanicorp’s production processes are designed with the same ingenuity as are the products that the company makes. Out of scope
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Re: Mechanicorp’s Product Costs [#permalink]
16 Oct 2009, 15:42
gave a thought again. should be A. High price will affect the reputation and customer wont buy the new product at low price hence difficulty in setting price
Asterix
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Re: Mechanicorp’s Product Costs [#permalink]
17 Oct 2009, 09:55
A is cancelled because it is given in the stimulus that the co wants to keep a modest profit margin to maintain its reputation.
B - the correct answer.If sales volume is more, per unit fixed cost will go down and ultimately the co can earn huge profit.
C -incorrect because it is given that the co is maintaining modest profit margin.
D -incorrect. Since similar devices are available at less cost the new product cannot be sold.So this is not strengthen the conclusion.
E - Incorrect.Out of scope
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Re: Mechanicorp’s Product Costs [#permalink]
18 Oct 2009, 03:18
IMO A, as it is mentioned that at low price the product won't sell and if company increases the mark up price than that would be against its current market reputation.
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Re: Mechanicorp’s Product Costs [#permalink]
22 Oct 2009, 00:43
In between the conclusion and premises , I think there is a gap in logic.Correct answer choice bridges the gap. Answer A, according to me bridges the gap.So this is the correct answer.
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Re: Mechanicorp’s Product Costs [#permalink]
22 Oct 2009, 02:06
we have a dualism here:
on hand: the product's fair price is low and this would compromise consumer's perception of quality. Therefore, it would be reasonable to put its price above the fair price.
on the other hand: Mechanicorp's reputation is based on fair prices.
the only answer which has this dualism is A
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Re: Mechanicorp’s Product Costs [#permalink]
22 Oct 2009, 08:02
I go for B, A) It re-state the statement above without supplying additional premise or fix a clause. B) It's correct to supply additional premise to support the statement above C) Weaken the statement D and E are irrelevant So what is OA?
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Re: Mechanicorp’s Product Costs [#permalink]
05 Jan 2011, 10:15
can someone give a concrete conclusion as to how A is correct answer
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Re: Mechanicorp’s Product Costs [#permalink]
05 Jan 2011, 15:18
+1 A OA?
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Re: Mechanicorp s newest product costs so little to make that it [#permalink]
08 Mar 2012, 16:01
Official Answer please?
Thanks
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Re: Mechanicorp s newest product costs so little to make that it [#permalink]
08 Mar 2012, 16:18
What is the official answer?
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Re: Mechanicorp s newest product costs so little to make that it [#permalink]
08 Mar 2012, 19:08
It's not a "strengthen" question, it's a "Must be True" question.
Answer should be A
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Re: Mechanicorp s newest product costs so little to make that it
[#permalink]
08 Mar 2012, 19:08
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