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Re: Prohibitively high tariffs on salmon from Winterland allow [#permalink]
+1 E , if the osum salmon is not a dollar better in quality than the winterland's , there is no reason for people to keep buying the Osum's low quality salmon unless the prices for Osum salmon is drastically reduced.
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Re: Prohibitively high tariffs on salmon from Winterland allow [#permalink]
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+1 E

Premise - Prohibitively high tariffs on salmon from Winterland allow companies in the Republic of Osum to sell salmon without any foreign competition. Some economists believe that the tariffs partly explain why Osum salmon costs one dollar more than Winterland’s salmon

Conclusion - If the government removed the tariffs, consumers would either purchase more Winterland salmon than they would Osum salmon or else Osum companies would have to reduce the price of their salmon.

We need to find the assumption on which the conclusion is based. Osum salmon is costlier than Winterland's but still people can buy osum' salmon if it is better in quality than winterland's salmon, but here we are concluding that people won't buy osum's salmon suggesting that it is not as good as winterland's in quality

Option E tis our answer
:-D
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Re: Prohibitively high tariffs on salmon from Winterland allow [#permalink]
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+1 E

Let's say the price in Winterland is $4 and tariff is $1 --> the last price that consumers have to pay is $5 while the price in Osum is $5 with no tariff.

=> The price in Osum is actually $1 higher than in Winterland due to the tariff.

Now tariff gone, price in Winterland is $4 vs $5 in Osum

=> Conclusion: either consumers will buy more salmon in Winterland ( because it's $1 cheaper ) or companies in Osum have to reduce price (to compete with companies in Winterland)

But what if comsumers still willing to pay higher price to buy salmon in Osum because of better quality? So choice E states that this difference in quality is not worth more than $1, which means consumers may afford only $0.5 for that better quality. So Either they buy $4-Winterland or $4.5-Osum, not $5.

=> This leads to the conclusion
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Re: Prohibitively high tariffs on salmon from Winterland allow [#permalink]
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Daeny wrote:
Prohibitively high tariffs on salmon from Winterland allow companies in the Republic of Osum to sell salmon without any foreign competition. Some economists believe that the tariffs partly explain why Osum salmon costs one dollar more than Winterland’s salmon. If the government removed the tariffs, consumers would either purchase more Winterland salmon than they would Osum salmon or else Osum companies would have to reduce the price of their salmon.


Republic of Osum - Prohibitively High tariff on salmon from Winterland allows the country to seel without foreign competition.

Economist - Osum salmon > Winterland’s salmon. { Due to tariff }

If government removes tariff there will be 2 option available for Osum companies -

(1) Osum companies would have to reduce the price

(2) Consumers would either purchase more Winterland salmon

The conclusion reached in the last sentence depends upon which of the following assumptions?

A. The legislature of Osum proposes tariffs and the Prime Minister ratifies them.

Out of scope...

B. Winterland has passed a countervailing tariff against salmon from the Republic of Osum.

Not relevant.

C. A constitutional amendment is not needed to remove the tariffs.

Out of scope.

D. Although the Republic of Osum has lower tariffs on salmon from other countries besides Winterland, these tariffs are just as effective in eliminating all salmon imports.

True , but we don't have sufficient data to claim " all salmon imports. "...

E. Osum salmon is not over one dollar better in quality than is Winterland salmon.

Possible...

The passage mentions2 option available for Osum companies to retain their sales / profit level...
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Re: Prohibitively high tariffs on salmon from Winterland allow [#permalink]
A. The legislature of Osum proposes tariffs and the Prime Minister ratifies them. ( Wrong answer : The concluding statement of the argument has been put forward as a conditional dependent clause of “If X then Y” type. Hence it is just a speculative scenario )
B. Winterland has passed a countervailing tariff against salmon from the Republic of Osum. ( Wrong Answer : This is irrelavent to the topic of discussion.)
C. A constitutional amendment is not needed to remove the tariffs. ( Wrong Answer : irrelevant to the argument at hand.)
D. Although the Republic of Osum has lower tariffs on salmon from other countries besides Winterland, these tariffs are just as effective in eliminating all salmon imports. ( Wrong Answer : The argument is only concerned with Winterland Salmon.)
E. Osum salmon is not over one dollar better in quality than is Winterland salmon.( Correct Answer : If it is not better then there is no reason why Osum salmon should cost dollar more than Winterland salmon)
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Re: Prohibitively high tariffs on salmon from Winterland allow [#permalink]
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).

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Re: Prohibitively high tariffs on salmon from Winterland allow [#permalink]
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