During the late seventies when Japan was rapidly expanding its share o

Official Explanation

Only two answer-choices have any real merit—(A) and (E). The argument generalizes from the survey to the general car-buying population, so the reliability of the projection depends on how representative the sample is. At first glance choice (A) seems rather good, because 10 percent does not seem large enough.
However, political opinion polls typically are based on only .001 percent of the population. More importantly, we don’t know what percentage of GM car owners received the survey. Choice (E), on the other hand, points out that the survey did not represent the entire public, so it is the answer.

The other choices can be quickly dismissed. Choice (B) simply states that Ford made the same mistake that GM did. Choice (C) is irrelevant. Finally, choice (D), rather than explaining the discrepancy, would give even more reason for GM to continue making large cars.
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ARGUMENT
[prem] GM conducted a survey in which those who replied preferred large cars;
[prem] GM decided, after the survey, to continue building large cars;
[con] GM lost even more market share to Japanese manufacturers.

A. is 10% of resp. enough to decide? this does not explain the paradox;
B. irrelevant;
C. irrelevant;
D. irrelevant;

Ans (E) the results of the survey were skewed towards large car owners.

During the late seventies when Japan was rapidly expanding its share of the American auto market, GM surveyed owners of GM cars and asked them whether they would be more willing to buy a large, powerful car or a small, economical car. Seventy percent of those who responded said that they would prefer a large car. On the basis of this survey, GM decided to continue building large cars. Yet during the '80s, GM lost even more of the market to the Japanese."

Which one of the following, if it were determined to be true, would best explain this discrepancy?

A. Only 10 percent of those who were polled replied.

B. Ford which conducted a similar survey with similar results continued to build large cars and also lost more of their market to the Japanese.

C. The surveyed owners who preferred big cars also preferred big homes.

D. GM determined that it would be more profitable to make big cars.

E. Eighty percent of the owners who wanted big cars and only 40 percent of the owners who wanted small cars replied to the survey.

Stimulus: GM motors performed a survey to understand the customer needs and post survey found that customers want big cars. GM motors continued to manufacture big cars and still they weren't doing good in terms of sale.

IMO E as it explains that the voter population who voted choose their preference rather than the true market choice. so though they manufactured as per market needs it still could not do good in sales.

I'm bit confused between A and E but I'm going with option A. As option A tells us that survey didn't had the complete data as only 10% of the car owner replied to survey.

Option E

A) Although it seems good, it is not indicative. There are many studies which rely on very small samples

B) No relationship with the conclusion. Just states that other firm made the same error

C) Irrelevant

D) It does not explain discrepancy, but strengthens GM making larger cars

E) Correct. A sample is not representative of the whole population
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Conclusion
On the basis of this survey, GM decided to continue building large cars. Yet during the '80s, GM lost even more of the market to the Japanese."

IMO A
Only 10 percent of those who were polled replied.



During the late seventies when Japan was rapidly expanding its share of the American auto market, GM surveyed owners of GM cars and asked them whether they would be more willing to buy a large, powerful car or a small, economical car. Seventy percent of those who responded said that they would prefer a large car. On the basis of this survey, GM decided to continue building large cars. Yet during the '80s, GM lost even more of the market to the Japanese."

Which one of the following, if it were determined to be true, would best explain this discrepancy?

A. Only 10 percent of those who were polled replied.

B. Ford which conducted a similar survey with similar results continued to build large cars and also lost more of their market to the Japanese.

C. The surveyed owners who preferred big cars also preferred big homes.

D. GM determined that it would be more profitable to make big cars.

E. Eighty percent of the owners who wanted big cars and only 40 percent of the owners who wanted small cars replied to the survey

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A. Only 10 percent of those who were polled replied.......OUT OF SCOPE

B. Ford which conducted a similar survey with similar results continued to build large cars and also lost more of their market to the Japanese......looking at a similar situation doesnt explains the descripancy

C. The surveyed owners who preferred big cars also preferred big homes.....IRRELEVANT

D. GM determined that it would be more profitable to make big cars......IRRELEVANT

E. Eighty percent of the owners who wanted big cars and only 40 percent of the owners who wanted small cars replied to the survey........this explains the reason of discrepancy as not covering all the people for the survey.

OA:E

B. Ford which conducted a similar survey with similar results continued to build large cars and also lost more of their market to the Japanese.
Eliminate B because this explanation doesn't solve the missing link between the result of the survey and the loss in the market of GM.

C. The surveyed owners who preferred big cars also preferred big homes.
Eliminate C because there is no relation between preferring big cars, big homes and buying a small car in reality.

D. GM determined that it would be more profitable to make big cars.
Option D there is no relation between profitability and GM's loss in the market. => Eliminate

E. Eighty percent of the owners who wanted big cars and only 40 percent of the owners who wanted small cars replied to the survey
There are only rates that are not sufficiency. We don't know how many people who wanted big cars and how many people who wanted small cars.
Eliminate E

A. Only 10 percent of those who were polled replied.
10% percent of owners of GM cars were polled replied maybe not enough data to make a decision.
=> Choice A
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Let the total people surveyed is 100
according to GM survey 70 people prefer big cars 30 others
but if we were to resolve this then we would have to present something in the line so that we can say that GM overestimated the numbers.
What E says
0.8X(big cars)+0.4Y(small cars)=100
but according to the survey 70 people prefer big cars
0.8X=70
X=87.5
So GM started building cars by taking the preference of the 87 people instead 70.
E:)