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I feel I may not be following the correct logical reasoning needed for this type of questions, I discarded E because, for me, it would be irrelevant whether they receive bonuses for huge discounts There is nothing in the argument, reasoning that there is no room for negotiation and implying it would be extremely dangerous and subjective, I cannot pictur this workers going to their boss, and tell them they didn't buy the cheapest product (and let's assume it is a medium quality product) but another one which was more expensive just for their bonus ... They will get immediately fired, GMAT has to consider reality in real world. Answer C follows a much more business sensible reasoning, why? because if prices range for example between 10 to 15 ante suddenly one of the prices goes to 5 ... I would doubt about their intention and assume they need to sell volume also since I am an expert and I am suppossed to make a due diligence (which would be absolutely logical to assume) this would reductio in price would a perfect weakener.
It's crucial here to differentiate between (1) the published prices (aka the "list prices") and (2) the prices that the buyers actually pay.
Imagine that these workstations are typically sold for about $1,000:
- The manufacturer creates a catalog with its most recent models, and that catalog contains the published (list) prices of each one.
- Now a buyer comes in and says, "Hey, I'd like to buy 50 of these $1,000 workstations. How about you sell them to me for $750 each?"
- The manufacturer agrees, and the buyer gets to brag to his boss about how he/she saved the company 25% off the list price.
Now let's move to an alternate dimension where that same manufacturer says, "You know what? Let's publish LOWER list prices in our catalog to generate interest among the buyers!"
- Now the LIST price for those same workstations is, say, $800 instead of $1,000.
- The same buyer comes in wanting to buy 50, but the manufacturer still isn't willing to sell them for less than $750 (to get the same profit as in the previous example).
- So the buyer in this dimension scores the same exact deal. But now the buyer only gets to brag about saving 6-7% off the list price.
If (E) is true, then the second situation doesn't bode well for the buyer. He/she would rather hunt for a manufacturer who publishes
inflated list prices -- that way, there's more room for negotiation and more room for buyer bragging and bonuses! The key point is that we aren't talking about changing the actual purchase prices -- we're only changing the
published (list) prices.
As for (C), you'd have to assume quite a bit to make this one work. Maybe those "very knowledgeable" buyers look at the price of 5 and say, "Wow, that's a great price for this kind of workstation! Let's buy a bunch while they are so cheap!" In that case, (C) could explain why the plan is likely to succeed.
(E) is a much better option. I hope that helps!
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