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Rumored declines in automobile-industry revenues are [#permalink]
26 Dec 2003, 08:30
67% (02:19) correct
33% (25:50) wrong based on 3 sessions
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Rumored declines in automobile-industry revenues are exaggerated. It is true that automobile manufactures' share of the industry's revenues fell from 65 percent two years ago to 50 percent today, but over the same period suppliers of automobile parts had their share increase from 15 percent to 20 percent and service companies (for example, distributors, dealers, and repairs) had their share increase from 20 percent to 30 percent.
Which one of the following best indicates why the statistics given above provide by themselves no evidence for the conclusion they are intended to support?
(A) The possibility is left open that the statistics for manufactures' share of revenues come from a different source than the other statistics.
(B) No matter what changes the automobile industry's overall revenues undergo, the total of all shares of these revenues must be 100 percent.
(C) No explanation is given for why the revenue shares of different sectors of the industry changed
(D) Manufactures and parts companies depend for their revenue on dealers' success in selling cars.
(E) Revenues are an important factor but are not the only factor in determining profits.
B is the answer.
Add up the first set of percentages and then add up the second set of percentages. They add upto 100% There is actually no change in the percentage of the revenue. However total revenue might be less or more because we dont know how much each subsector in the auto industry generated.
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