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# Paper&Print is a chain of British stores selling

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Paper&Print is a chain of British stores selling [#permalink]

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14 Jun 2008, 02:16
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Difficulty:

15% (low)

Question Stats:

81% (02:27) correct 19% (01:59) wrong based on 480 sessions

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Paper&Print is a chain of British stores selling magazines, books, and stationery products. In Britain, magazines' retail prices are set by publishers, and the retailer's share of a magazine's retail price is 25 percent. Since Paper&Print's margin on books and stationery products is much higher, the chain's management plans to devote more of its stores' shelf space to books and stationery products and reduce the number of magazine titles that its stores carry.

Which of the following, if true, most strongly argues that the plan, if put into effect, will not increase Paper&Print's profits?

(A) Recently magazine publishers, seeking to increase share in competitive sectors of the market, have been competitively cutting the retail prices of some of the largest circulation magazines.
(B) In market research surveys, few consumers identify Paper&Print as a book or stationery store but many recognize and value the broad range of magazines it carries.
(C) The publisher's share of a magazine's retail price is 50 percent, and the publisher also retains all of the magazine's advertising revenue.
(D) Consumers who subscribe to a magazine generally pay less per issue than they would if they bought the magazine through a retail outlet such as Paper&Print.
(E) Some of Paper& Print's locations are in small towns and represent the only retail outlet for books within the community.
[Reveal] Spoiler: OA
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14 Jun 2008, 02:26
B for me

Which of the following, if true, most strongly argues that the plan, if put into effect, will not increase Paper&Print's profits?

A: Recently magazine publishers, seeking to increase share in competitive sectors of the market, have been competitively cutting the retail prices of some of the largest circulation magazines. -> this will reduce the profits for all the retailers, and irrelevant for the given context

B: In market research surveys, few consumers identify Paper&Print as a book or stationery store but many recognize and value the broad range of magazines it carries.-> sounds good. More consumers identify and buy magazines from P&P than they buy books/stationery thus profits/margins would be less if magazines are reduced.

C: The publisher's share of a magazine's retail price is 50 percent, and the publisher also retains all of the magazine's advertising revenue.-> irrelevant

D: Consumers who subscribe to a magazine generally pay less per issue than they would if they bought the magazine through a retail outlet such as Paper&Print.-> irrelevant,eliminate it

E: Some of Paper& Print's locations are in small towns and represent the only retail outlet for books within the community. ->this strengthens the idea but "some" eliminates the choice
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14 Jun 2008, 07:12
i concur with prasannar!
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14 Jun 2008, 07:48
i went for B as well. If consumers dont know that Paper&Print offer stationary products, then they will not shop there for said products ... which means that even if Paper&Print devoted the whole store to stationary products, if no one is buying it, rev wont increase.
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17 Jun 2008, 22:50
OA is B, thanks!
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18 Jun 2008, 03:04
Done deal - B!!

Lexis - what is the source of this question? Thanks mate!
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18 Jun 2008, 03:28
What if they sell more magazines and less books and stationary products. B clearly raises this issue.

lexis wrote:
Paper&Print is a chain of British stores selling magazines, books, and stationery products. In Britain, magazines' retail prices are set by publishers, and the retailer's share of a magazine's retail price is 25 percent. Since Paper&Print's margin on books and stationery products is much higher, the chain's management plans to devote more of its stores' shelf space to books and stationery products and reduce the number of magazine titles that its stores carry.

Which of the following, if true, most strongly argues that the plan, if put into effect, will not increase Paper&Print's profits?

A: Recently magazine publishers, seeking to increase share in competitive sectors of the market, have been competitively cutting the retail prices of some of the largest circulation magazines.
B: In market research surveys, few consumers identify Paper&Print as a book or stationery store but many recognize and value the broad range of magazines it carries.
C: The publisher's share of a magazine's retail price is 50 percent, and the publisher also retains all of the magazine's advertising revenue.
D: Consumers who subscribe to a magazine generally pay less per issue than they would if they bought the magazine through a retail outlet such as Paper&Print.
E: Some of Paper& Print's locations are in small towns and represent the only retail outlet for books within the community.
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18 Jun 2008, 04:03
B for me too
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18 Jun 2008, 08:20
B for me
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18 Jun 2008, 13:09
vksunder wrote:
Done deal - B!!

Lexis - what is the source of this question? Thanks mate!

GMAT actual paper test
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18 Jun 2008, 13:30
Thanks mate!
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24 Jun 2010, 11:40
Nice question, B for me. Thanks for the explanation prasannar .
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24 Jun 2010, 13:26
Lil bit easy !!
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24 Jun 2010, 13:26
Good one!!! nice explanation guys
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27 Jun 2010, 15:10
B is clearly the winner: if no one (or just a few) buys your merchandise, then you run at a loss- that's what B is saying.
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28 Jun 2011, 09:36
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B..easy
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28 Jun 2011, 10:14
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28 Jun 2011, 13:04
agree with b
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29 Jun 2011, 06:19
B for me

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16 Aug 2011, 09:33
+1 B
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Re: CR: Paper&Print   [#permalink] 16 Aug 2011, 09:33

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