Find all School-related info fast with the new School-Specific MBA Forum

It is currently 30 Sep 2014, 20:22

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Questions 19-20 are based on the following. Surveys show

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Senior Manager
Senior Manager
avatar
Joined: 26 May 2009
Posts: 317
Followers: 2

Kudos [?]: 35 [0], given: 13

Questions 19-20 are based on the following. Surveys show [#permalink] New post 28 Jun 2009, 16:20
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
Questions 19-20 are based on the following.
Surveys show that every year only 10 percent of cigarette smokers switch brands. Yet the manufacturers have been spending an amount equal to 10 percent of their gross receipts on cigarette promotion in magazines. It follows from these figures that inducing cigarette smokers to switch brands did not pay, and that cigarette companies would have been no worse off economically if they had dropped their advertising.
19. Of the following, the best criticism of the conclusion that inducing cigarette smokers to switch brands did not pay is that the conclusion is based on
(A) computing advertising costs as a percentage of gross receipts, not of overall costs
(B) past patterns of smoking and may not carry over to the future
(C) the assumption that each smoker is loyal to a single brand of cigarettes at any one time
(D) the assumption that each manufacturer produces only one brand of cigarettes
(E) figures for the cigarette industry as a whole and may not hold for a particular company
Manager
Manager
avatar
Joined: 14 May 2009
Posts: 143
Schools: AGSM '16
Followers: 2

Kudos [?]: 12 [0], given: 28

Re: Cigarettes.. [#permalink] New post 28 Jun 2009, 17:59
I would probably go with B.
Intern
Intern
avatar
Joined: 12 Jun 2009
Posts: 32
Location: Delhi, India
Schools: CBS, Wharton, LBS, Kellogg
Followers: 0

Kudos [?]: 0 [0], given: 1

Re: Cigarettes.. [#permalink] New post 28 Jun 2009, 18:47
I would go with C

B - May or may not carry into the future. If it does, then the expenditure is useless.
C - If I assume that loyalties switch, I am giving my brand good visibility by advertising.
_________________

AD

Director
Director
avatar
Joined: 23 May 2008
Posts: 840
Followers: 3

Kudos [?]: 27 [0], given: 0

Re: Cigarettes.. [#permalink] New post 28 Jun 2009, 19:04
was stuck between C and D, will go with C
Manager
Manager
avatar
Joined: 14 May 2009
Posts: 143
Schools: AGSM '16
Followers: 2

Kudos [?]: 12 [0], given: 28

Re: Cigarettes.. [#permalink] New post 28 Jun 2009, 19:10
Does anyone know the OA?
Senior Manager
Senior Manager
avatar
Joined: 26 May 2009
Posts: 317
Followers: 2

Kudos [?]: 35 [0], given: 13

Re: Cigarettes.. [#permalink] New post 28 Jun 2009, 19:55
OA is E. Does someone think of a better explanation . I was thinking of C.
Intern
Intern
avatar
Joined: 12 Jun 2009
Posts: 32
Location: Delhi, India
Schools: CBS, Wharton, LBS, Kellogg
Followers: 0

Kudos [?]: 0 [0], given: 1

Re: Cigarettes.. [#permalink] New post 28 Jun 2009, 23:41
Personally , I don't think E makes any sense at all. The passage does not talk abt ' a particular company' anywhere ..
_________________

AD

Senior Manager
Senior Manager
User avatar
Joined: 15 Jan 2008
Posts: 295
Followers: 2

Kudos [?]: 22 [0], given: 3

Re: Cigarettes.. [#permalink] New post 29 Jun 2009, 23:28
I think E is the only answer.

becoz, its known that 10% of the ppl switch brands and the cig manufacturers spend around 10% of their gross receipts for advertising the cigarettes.

Conclusion is about the whole industry i.e even if it didnt spend that money, they will anyways get the customers and the overall gross receipts will remain same for the industry.

But if we take the case of single company, the company may spend around 10% but get the loayality of all customers ( 10%).
i.e the advertising money they spend may be lesss and the money they generate through switched customers may be more.
Re: Cigarettes..   [#permalink] 29 Jun 2009, 23:28
    Similar topics Author Replies Last post
Similar
Topics:
Following two questions are based on the following passage. crejoc 9 18 Aug 2009, 07:46
3 Questions 19-20 are based on the following. Blood banks will apramanik 18 17 Aug 2009, 08:33
8 Questions 9-10 are based on the following. In the marcodonzelli 9 30 Jan 2008, 05:39
The following questions are based on this passage: At an JCLEONES 9 08 Jan 2008, 10:14
Questions 19-20 are based on the following. Blood banks will WinWinMBA 13 21 Apr 2005, 15:45
Display posts from previous: Sort by

Questions 19-20 are based on the following. Surveys show

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.