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Oil companies are converting more and more of the full

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Oil companies are converting more and more of the full [#permalink] New post 18 Jun 2012, 05:54
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Question Stats:

66% (02:21) correct 33% (01:14) wrong based on 42 sessions
Oil companies are converting more and more of the full service stations they own into gas-only stations, eliminating all maintenance and repair works. Since a gas-only station usually sells much more gas than does a full-service station, such conversion should increase the profit of the gas station operators who lease stations from the oil companies.

Which of the following statements, if true, would most weaken the conclusion drawn above?

A) Most of the profit made by a full service station operator came from the maintenance and repair work.

B) The amount of gas sold by individual gas stations varies considerably, depending on the location of the station.

C) The cost of leasing a full-service station is usually higher than the cost of leasing a gas-only station.

D) Many gas stations that are independently owned have also recently been converted into gas only stations.

E) Many gas only stations supplement their profits from gas sales by operating convenience-store franchises in conjunction with gas stations.

Edit: Notice: give the summary of the argument in the title
[Reveal] Spoiler: OA
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Re: Oil companies full service station and gas-only station [#permalink] New post 18 Jun 2012, 08:38
The conclusion of the argument is about the profit, not cost and income. So, notice this. Only choice A matched the condition.
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Re: Oil companies full service station and gas-only station [#permalink] New post 18 Jun 2012, 12:32
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Hmmm...I'm going to preface my explanation: this is not a 600-700 level question. It is realistically a sub-500 question. Why? Well let me dissect it quickly.

Full-service stations (gas + repairs) want to switch to gas-only stations to save money. What would put a 'monkey wrench', so to speak, in the plans? If full-service stations make most of their money from repairs. And just like that we have answer choice (A). As for why the other answers aren't correct...

B) The amount of gas sold by individual gas stations varies considerably, depending on the location of the station.

This answer choice does not indicate why it would be a bad idea, profit-wise, to switch from full-service to gas-only.

C) The cost of leasing a full-service station is usually higher than the cost of leasing a gas-only station.

This is a soft answer: the word 'usually' needs to be replaced with something much stronger, such as 'almost always.' Of course the answer choice would have to include something on the overall profit of a full-service vs. gas-only, as cost of operating is only one factor.

D) Many gas stations that are independently owned have also recently been converted into gas only stations.

Out of scope.

E) Many gas only stations supplement their profits from gas sales by operating convenience-store franchises in conjunction with gas stations.

If this is the case, then we have a reason how gas-only stations make profit. We need an answer choice that show that full-station will lose money if it switches to gas-only stations.
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Re: Oil companies full service station and gas-only station   [#permalink] 18 Jun 2012, 12:32
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