Contrary to earlier predictions, demand for sugarcane has not increase

To tackle such kind of questions,replace

'Except' by 'does not' in the question stem.

Any of the following statements, if true about last year, helps to explain the rise in profits EXCEPT:

can be replaced by

Any of the following statements, if true about last year, does not help to explain the rise in profits

IMO A.

Argument analysis :
Contrary to earlier predictions, demand for sugarcane has not increased in recent years. A background information.

Yet, even though prices and production amounts have also been stable during the last three years, sugarcane growers last year increased their profits by more than ten percent over the previous years level. Yet: indicating contrast

Profit = Revenue – Cost
Revenue = Price*Quantity Price. Neither demand (Quantity) nor Price increased.

increase in Profit : different possiblities
a. Revenue  - Not possible as mentioned in the premise
b. Cost  - Only possibility to justify the increase in profit
c. Both happened - Not possible as mentioned in the premise
d. Other possibilities as well such as i and ii - cannot happen because Revenue has not changed
I. Revenue  and Cost  - Yet Absolute value was more
II. Revenue  and Cost  - Yet Absolute value was more

Question Stem : Any of the following statements, if true about last year, helps to explain the rise in profits EXCEPT:
Except: 4 options will talk about decrease in cost and 1 will mention about increase or any other irrelevant data point.

(A) Many countries that are large consumers of sugarcane increased their production of sugarcane-based ethanol, yet their overall consumption of sugarcane decreased. Irrelevant
(B) Sugarcane growers have saved money on wages by switching from paying laborers an hourly wage to paying them by the amount harvested. Mentions decrease in cost
(C) The price of oil, the major energy source used by sugarcane growers in harvesting their crops, dropped by over twenty percent. Mentions decrease in cost
(D) Many small sugarcane growers joined together to form an association of sugarcane producers and began to buy supplies at low group rates. Mentions decrease in cost
(E) Rainfall in sugarcane-growing regions was higher than it had been during the previous year, allowing the growers to save money on expensive artificial irrigation. Mentions decrease in cost.
Option A

Sugarcane Demand has not increased. Price and Production amount have been stable. Still, More profits.

Now, we can find out the options that explains this shocking story. Left over would be our answer.

(A) Many countries that are large consumers of sugarcane increased their production of sugarcane-based ethanol. yet their overall consumption decreased. Yeah. This is not explaining what happened. So, Correct.
(B) Sugarcane growers have saved money on wages by switching from paying laborers an hourly wage to paying them by the amount harvested. : Ohh.. So, they saved something and hence, got more profit. Cool.
(C) The price of the oil, the major energy source used by sugarcane growers in harvesting their crops, dropped by morethan 20%. Same as B
(D) Many small sugarcane growers joined together to form an association of sugarcane producers and began to buy supplies at low group rates. Same as B
(E) Rainfall in sugarcane-growing regions was higher than it had been during the previous year, allowing the growers to save money on expensive arificial irrigation. Same as B

Here is how I solved:

Argument: Sugarcane profits up by 10%. yet production and demand are stable.

Pre thinking

We have to find all answers EXCEPT one that does not strengthen. It doesn't necessarily have to weaken it could have no impact.

To the original argument...

If Profits are up and demand is not, then it leaves us with costs. The costs MUST have reduced to bring profits up.

According to CR Bible, in many such arguments, correct answer could be placed @ A. Because it is the first answer and the test taker is likely to let it go. So I tell myself, be extra careful of A.

That's all.

Read all choices. B,C,D & E all contain reason how costs reduced. Only A has an case where there is NO impact on answer.

Therefore correct answer A.

Sent from my SM-N900 using GMAT Club Forum mobile app

Prediction: Demand for sugarcane would increase
Result: There was no increase in demand
Price & Production: Stable => Sugarcane growers increase their profits by more than 10% over the previous year's level.

Any of the following statements, if true about last year, helps to explain the rise in profits EXCEPT:

(A) Many countries that are large consumers of sugarcane increased their production of sugarcane-based ethanol, yet their overall consumption of sugarcane decreased.
Explanation: This is the only option that does not explain the rise in profit. - CORRECT

(B) Sugarcane growers have saved money on wages by switching from paying laborers an hourly wage to paying them by the amount harvested.
Explanation: By saving money on wage, it is possible to increase their profit. - INCORRECT

(C) The price of oil, the major energy source used by sugarcane growers in harvesting their crops, dropped by over twenty percent.
Explanation: Price of oil dropped by 20%. Yes, it is possible to increase their profit. - INCORRECT

(D) Many small sugarcane growers joined together to form an association of sugarcane producers and began to buy supplies at low group rates.
Explanation: Bought supplies at low group rates. Yes, it is possible to increase their profit. - INCORRECT

(E) Rainfall in sugarcane-growing regions was higher than it had been during the previous year, allowing the growers to save money on expensive artificial irrigation.
Explanation: Saved money on expensive artificial irrigation. Yes, it is possible to increase their profit. - INCORRECT

Does anyone have a good way to make sure you are seeing an except question?

I've been missing a few because I proceed as normal, without an except. Perhaps a checklist that they leverage on each question?

Dear Friends,

Here is the detailed explanation to this question-



Mind-map: Sugarcane demand has not risen → prices and production remained constant → yet, growers made more profit.

Missing link: Between constant demand/ price/ production of sugarcane and the conclusion that growers made more profit.

Expectation from the correct answer choice: To not explain the reason for the rise in profits.

Choice A: This answer choice focuses on the demand and supply of sugarcane; while the increased production of sugarcane-based ethanol meant an increased supply of sugarcane for such production, the overall consumption of sugarcane decreased; a situation of oversupply does not help explain why the profits of the sugarcane growers grew; logically, a situation of oversupply must lead to a decrease and not increase in profits. As this answer choice does NOT explain the reason for higher profits, it is a fine answer choice.
Choice B: This answer choice suggests that by saving money on wages, the sugarcane growers were able to lower costs and amass greater profits; hence, it is a fine explanation for the rise in profits and does not qualify as the correct answer choice.
Choice C: This answer choice indicates that the drop in the price of oil helped the sugarcane growers lower the cost of producing the crop and thereby amass greater profits; thus, it is a valid explanation for the rise in profits and is not the correct answer choice.
Choice D: This answer choice implies that by forming an association and buying supplies at wholesale rates (or, in bulk), the growers were able to reduce costs and make higher profits; hence, it provides a reason for the rise in profits and is not a fine answer choice.
Choice E: This answer choice suggests that by saving money on expensive artificial irrigation, the growers were able to reduce costs and make higher profits; thus, it is a fine explanation for the increase in profits and is not the correct answer choice.

Hence, A is the best answer choice.

To understand the concept of “Characteristics of an Explanation Statement on GMAT Critical Reasoning”, you may want to watch the following video (~2 minutes):



All the best!
Experts' Global Team

Remember to be clear what you are looking for, people. Also go through and knock out all the answer choices. It's clear that a common theme running through the eliminations in this one is costs becoming lower for some reason or the other.

Andrewcoleman
Its as usual except for the fact that if you understood the argument correctly and unfortunately skipped the EXCEPT part in question stem, you can observe that you have four answers that are correct and one incorrect. Here itself you should know, a red flag kind of situation, that there can't be four correct answer. So what for you is incorrect is actually the right answer.

This is true only when you understood the argument fully - an odd one out situation.

Please note that this is not an strategy and for hard questions this might not even be that because understanding the argument part in itself is hard.

Though I answered the question correctly, I took more time than usual because I feel that the answer choices and stimulus are inconsistent. In the argument, it is explicitly mentioned that the production amount was stable, however, all the answer choices indicate a reduction in production costs.

Gylmitul
First of all, understand that you did well if you solved an EXCEPT question. Why..!!?
These questions generally take more time to answer, even if they are not the hardest for the simple reason that you have to go through all the choices - a time consuming effort.

Coming to the this questions, i see that you have got the crux right, hopefully, since profits can be increased in two ways either directly(increasing margins in this case) or indirectly(reducing cost). Only thing that you missed is that you found the choices and stimulus inconsistent - tail of the argument.
To understand consider a number-line. Let 100 be the total cost to the producers. So, amount, say 120, earned more than that is profit, broadly speaking.
Or if the revenue is 100 but the producers somehow decreased the cost, say 90, then also amount earned more than the cost is profit.

So, either way the are in profit, which is as per the stimulus 10% more than last year's - need not to know how.
Note that profit = revenue - cost remain always true here.

All choices EXCEPT A are doing that hence A is correct.

Making sense..!!?

Hello everyone

This is one interesting Critical Reasoning question that asks for the exception to be found.

Understanding the passage:

Contrary to earlier predictions, demand for sugarcane has not increased in recent years.
>>> Demand for sugarcane has not increased in recent years

Yet, even though prices and production amounts have also been stable during the last three years, sugarcane growers last year increased their profits by more than ten percent over the previous year's level.
>>>Prices and production has been stable during 3 years
>>> Still, growers of sugarcane increased profits by 10% over previous year's level.

Question stem: Any of the following statements, if true about last year, helps to explain the rise in profits EXCEPT:
That is, except one option, all others will support the explanation for rise in profits. The exception is the correct answer.

Answer Choice Analysis:
(A) Many countries that are large consumers of sugarcane increased their production of sugarcane-based ethanol, yet their overall consumption of sugarcane decreased.
Out of scope
This option is not correlated with profits of sugarcane growers. Thus, this is the correct answer.

(B) Sugarcane growers have saved money on wages by switching from paying laborers an hourly wage to paying them by the amount harvested.
Explains rise in profit.
This option explains how growers saved money to increase their profits.

(C) The price of oil, the major energy source used by sugarcane growers in harvesting their crops, dropped by over twenty percent.
Explains rise in profit.
Drop in price of oil explains the decrease in input cost to increase the profits of growers.

(D) Many small sugarcane growers joined together to form an association of sugarcane producers and began to buy supplies at low group rates.
Explains rise in profit.
This option also explains how sugarcane growers decreased their input costs by buying supplies at lower collective prices.

(E) Rainfall in sugarcane-growing regions was higher than it had been during the previous year, allowing the growers to save money on expensive artificial irrigation.
Explains rise in profit.
Higher rainfall decreased the need for expenditure on artificial irrigation.

Therefore, correct answer is (A)

I want to share here that CR is not an easy section to handle. I myself struggled a lot back in time.
Things changed when I joined e-GMAT's verbal course. I was able to better apply techniques for elimination of incorrect choices. Scholaranium was icing on the cake.
This played a huge part in my journey from V27 to V41.

I encourage you to see my journey in CR through the following link
https://www.youtube.com/watch?v=gH5XdVgO3bc&t=40s

Pls share your thoughts guys. Thanks.

STAY HUNGRY, STAY FOOLISH!!!

Hi Gylmitul

Your predicament is not totally unfounded.

However, please note that the passage gives account of production levels being the same and not the cost of production.

I hope this makes sense.
Pls drop me a message in case of any further query.

All the best.

Hi

Thanks for the swift response. However, I still feel like the data is inconsistent. They have used the word amount in the stimulus for the argument. Which is p*qty.




Posted from my mobile device

Hi again

Amounts of what? Of production levels? Production cost?

It is not very explicit and therefore it's safe to assume that it's the level of production that is constant.

Also, as someone who has given GMAT, I assure you that you won't get questions with this kind of ambiguity.
( you are not entirely wrong)

Anything else I can help you with? Feel free to connect.

Regards

VeritasKarishma

Can u explain option A.

Price and production of sugarcane has been stable. (This means the revenue has remained stable)
Yet, profit has increased.

What does this mean? How can you explain this? If revenue has remained same but profit has increased, it means cost must have decreased.
Profit = Revenue - Cost

It is an except explain question. So the options will tell us how the cost to the farmer has reduced. The option that does not tell us about reduced cost will not explain the situation and will be the answer.

(A) Many countries that are large consumers of sugarcane increased their production of sugarcane-based ethanol, yet their overall consumption of sugarcane decreased.

This tells us that for many countries overall consumption of sugarcane decreased. But out premises tell us that price and production have remained stable. If consumption has decreased, it doesn't explain increase in profits. If consumption has remained the same because consumption in other countries has increased, it still doesn't explain increase in profits. This option does not talk about how cost has reduced. As discussed, this is our answer.

(B) Sugarcane growers have saved money on wages by switching from paying laborers an hourly wage to paying them by the amount harvested.

Wages reduced so cost reduced.

(C) The price of oil, the major energy source used by sugarcane growers in harvesting their crops, dropped by over twenty percent.

Input cost reduced so cost reduced.

(D) Many small sugarcane growers joined together to form an association of sugarcane producers and began to buy supplies at low group rates.

Supply cost reduced to cost reduced.

(E) Rainfall in sugarcane-growing regions was higher than it had been during the previous year, allowing the growers to save money on expensive artificial irrigation.

Irrigation cost reduced so cost reduced.

Answer (A)