Over the past five years, the price gap between name-brand : GMAT Critical Reasoning (CR)
Check GMAT Club Decision Tracker for the Latest School Decision Releases http://gmatclub.com/AppTrack

 It is currently 24 Jan 2017, 12:43

### 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

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

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Over the past five years, the price gap between name-brand

Author Message
TAGS:

### Hide Tags

Senior Manager
Joined: 12 Mar 2009
Posts: 311
Followers: 3

Kudos [?]: 322 [1] , given: 1

Over the past five years, the price gap between name-brand [#permalink]

### Show Tags

30 Jun 2009, 22:59
1
KUDOS
1
This post was
BOOKMARKED
00:00

Difficulty:

35% (medium)

Question Stats:

71% (02:02) correct 29% (01:13) wrong based on 204 sessions

### HideShow timer Statistics

9. Over the past five years, the price gap between name-brand cereals and less expensive store-brand cereals has become so wide that consumers have been switching increasingly to store brands despite the name brands’ reputation for better quality. To attract these consumers back, several manufacturers of name-brand cereals plan to narrow the price gap between their cereals and store brands to less than what it was five years ago.

Which of the following, if true, most seriously calls into question the likelihood that the manufacturers’ plan will succeed in attracting back a large percentage of consumers who have switched to store brands?

A. There is no significant difference among manufacturers of name-brand cereals in the prices they charge for their products.
B. Consumers who have switched to store-brand cereals have generally been satisfied with the quality of those cereals.
C. Many consumers would never think of switching to store-brand cereals because they believe the name brand cereals to be of better quality.
D. Because of lower advertising costs, stores are able to offer their own brands of cereals at significantly lower prices than those charged for name-brand cereals.
E. Total annual sales of cereals—including both name-brand and store-brand cereals—have not increased significantly over the past five years.

I dont know the answer, Kindly explain along with the right answer
[Reveal] Spoiler: OA
If you have any questions
New!
Manager
Joined: 16 Apr 2009
Posts: 160
Followers: 0

Kudos [?]: 20 [0], given: 0

Re: Over the past five years, the price gap between name-brand [#permalink]

### Show Tags

15 Jul 2009, 04:50
B looks like the ans.

Because if people are satisfied with the store-brand cereals then there is no reason for them to shift to other brands.Thus any efforts on the part of name-brand cereals manufacturers will go waste.
Director
Joined: 01 Apr 2008
Posts: 897
Name: Ronak Amin
Schools: IIM Lucknow (IPMX) - Class of 2014
Followers: 28

Kudos [?]: 648 [5] , given: 18

Re: Over the past five years, the price gap between name-brand [#permalink]

### Show Tags

15 Jul 2009, 22:52
5
KUDOS
yup B.
notice the phrases "to narrow the price gap" and "switching increasingly to store brands despite the name brands’ reputation for better quality".

This implies:
=> price difference will still be there and name brands' cereals will be 'slightly' costlier
=> the only and the most significant difference between the two types is quality.

Hence:
=>the only important factor to think about switching will be quality.

So, if customers are already satisfied with quality then there is no value-addition in switching to name brands.
Manager
Status: Stanford GSB
Joined: 02 Jun 2008
Posts: 100
Followers: 6

Kudos [?]: 164 [0], given: 4

Re: Over the past five years, the price gap between name-brand [#permalink]

### Show Tags

16 Jul 2009, 01:23
Good explanation, Economist.
Senior Manager
Status: Yeah well whatever.
Joined: 18 Sep 2009
Posts: 345
Location: United States
GMAT 1: 660 Q42 V39
GMAT 2: 730 Q48 V42
GPA: 3.49
WE: Analyst (Insurance)
Followers: 5

Kudos [?]: 72 [0], given: 17

Re: Over the past five years, the price gap between name-brand [#permalink]

### Show Tags

13 May 2010, 12:30
Yeah. Only B makes sense. D is a boobie trap but it has no substance. It doesn't reduce the likelihood of people switching back but if they're satisfied and it's cheaper then why change back?
_________________

He that is in me > he that is in the world. - source 1 John 4:4

Manager
Joined: 16 Feb 2010
Posts: 188
Followers: 2

Kudos [?]: 29 [0], given: 14

Re: Over the past five years, the price gap between name-brand [#permalink]

### Show Tags

15 May 2010, 04:29
B must be the ans
GMAT Club Legend
Joined: 01 Oct 2013
Posts: 10543
Followers: 920

Kudos [?]: 204 [0], given: 0

Re: Over the past five years, the price gap between name-brand [#permalink]

### Show Tags

12 Nov 2013, 03:56
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Current Student
Joined: 03 Feb 2013
Posts: 939
Location: India
Concentration: Operations, Strategy
GMAT 1: 760 Q49 V44
GPA: 3.88
WE: Engineering (Computer Software)
Followers: 134

Kudos [?]: 845 [0], given: 546

Re: Over the past five years, the price gap between name-brand [#permalink]

### Show Tags

06 Sep 2014, 00:02
9. Over the past five years, the price gap between name-brand cereals and less expensive store-brand cereals has become so wide that consumers have been switching increasingly to store brands despite the name brands’ reputation for better quality. To attract these consumers back, several manufacturers of name-brand cereals plan to narrow the price gap between their cereals and store brands to less than what it was five years ago.

Which of the following, if true, most seriously calls into question the likelihood that the manufacturers’ plan will succeed in attracting back a large percentage of consumers who have switched to store brands?

A. There is no significant difference among manufacturers of name-brand cereals in the prices they charge for their products. - OFS as we are not bothered about the prices charged among the name brand cereals.

B. Consumers who have switched to store-brand cereals have generally been satisfied with the quality of those cereals - The customers are already satisfied with the quality of the cereals and they will not come back even if the difference of the price is narrowed - Correct

C. Many consumers would never think of switching to store-brand cereals because they believe the name brand cereals to be of better quality - This is OFS as we are talking about other set of customers

D. Because of lower advertising costs, stores are able to offer their own brands of cereals at significantly lower prices than those charged for name-brand cereals - OFS

E. Total annual sales of cereals—including both name-brand and store-brand cereals—have not increased significantly over the past five years - OFS we are not bothered about the sales
_________________

Thanks,
Kinjal

My Application Experience : http://gmatclub.com/forum/hardwork-never-gets-unrewarded-for-ever-189267-40.html#p1516961
Prodigy for Tepper - CMU : http://bit.ly/cmuloan-kd

GMAT Club Legend
Joined: 01 Oct 2013
Posts: 10543
Followers: 920

Kudos [?]: 204 [0], given: 0

Re: Over the past five years, the price gap between name-brand [#permalink]

### Show Tags

25 Jan 2016, 16:40
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Re: Over the past five years, the price gap between name-brand   [#permalink] 25 Jan 2016, 16:40
Similar topics Replies Last post
Similar
Topics:
2 Over the past ten years, the population of Dismaston has grown five ti 1 09 Jun 2015, 11:56
12 Over the past ten years, the population of Dismiston has grown five ti 5 04 Sep 2014, 20:03
Over the past five years, the price gap between name-brand 4 24 Oct 2012, 04:40
Over the past five years, the price gap between name-brand 1 13 May 2010, 03:51
4 Over the past twenty-five years the introduction of 13 10 Mar 2010, 11:18
Display posts from previous: Sort by